accounting 2 chapter 20 homework

Arrow Products typically eams a contribution margin ratio of 25 percent and has current fixed costs of $80.000 Arrow's general manager is considering spending an additional $20.000 to do one of the following: 1. Start a new ad campaign that is expected to increase sales revenue by 5 percent 2. License a new computesized ordering system that is expected to increase Arrow's contribution margin ratio to 30 percent. Sales revenue for the coming year was initially forecast to equal \$1,200,000 (that is, without implementing eicher of the above options) 0-1. Compute the projected operating income for each option? a-2 For each option, how much will projected operating income increase or decrease relative to intial predictions? b. By what percentage would sales revenue need to increase to make the ad campaign as attractive as the ordering system? Complete this question try entering your answers in the tabs below. Compute the projected operating income for each option? The following information is available regarding the total manufacturing overhead of Bursa Mfg. Co. for a recent four-month period. a-1. Use the high-low method to determine the variable element of manufacturing overhead costs per machine-hour. (Round your answer to 2 decimal places.) a-2. Use the high-low method to determine the fixed element of monthly overhead cost. (Round "Manufocturing overheod cost" to 2 decimal places.) b. Bursa expects machine-hours in May to equal 5,300. Use the cost relationships determined in part a to forecast May's manufacturing overhead costs. (Round "Monufocturing overhead cost" to 2 decimal places.) c. Suppose Bursa had used the cost relationships determined in part a to estimate the total manufacturing overhead expected for the months of February and March By what amounts would Bursa have over-or underestimated these costs? (Round "Monufacturing overheod cost" to 2 decimal places.) Nicholls Provisions has been asked to submit a bid on supplying tents to the Boy Scouts of America. The company's current cost structure per tent is as follows. a. Assume that there would be no varnable sales commission on this special order. Determine the lowest unit price that Nicholls can bid without reducing its current level of operating income b. Assume the company desires a 46 percent contribution margin ratio from this sale and that a special sales commission of 2 percent of the bid price will be applied to the order instead of its normal $1 voriable sales commission Determine the bid price per unit given these unique circumstances For each of the six independent situations that follow, compute the missing amounts o. Using contribution margin per unit b. Using the contribution margin ratio: Complete this question by entering your answers in the tabs below. Using contribution margin per unit: Schreiner Instruments currently produces and sells 80,000 financial calculators monthly. At this level, its variable cost per calculator is $9 and its fixed cost per calculator is $6. The company's monthly breakeven point is 24,000 calculators. Determine Schreiner's current selling price per calculator. Finley Corporation has monthly fixed costs of $66.000. It sells two products for which it has provided the following information a. What total monthly sales revenue is required to break even if the relative sales mix is 30 percent for Product 1 and 70 percent for Product 2? (Hint: Determine the contribution margin ratio for each product) (Round your answer to the nearest dollar amount) b. What total monthly sales revenue is required to carn a monthly operating income of $16,000 if the relative sales mix is 20 percent for Product 1 and 80 percent for Product 2? (Round your answer to the nearest dollar amount.) Each of the following statements may (or may not) describe one of these technical terms. For each statement, indicate the accounting term described, or answer "None" if the statement does not correctly describe any of the terms. Guthrie industries manufactures and sells dog collars. The collars sell for \$12 each Information about the company's costs is as follows. o. Determine the company's monthly breakeven point in units b. Determine the sales volume (in dollars) required for a monthly operating income of $900.000 c. Compute the company's margin of safety if its current monthly sales level is $1,400,000 d. Estimate the amount by which monthly operating income will increase if Guthrie anticipates a $60,000 increase in monthly sales volume