All applicable exercises are available with McGraw-hill's Connect n Accounting. EXERCISE 5-1 Preparing a Contribution Format income Statement [L.01] Wheeler Corporation's most recent income statement follows: Required: Prepare a new contribution format incobis statement under each of the following conditions (consider cach case independently): 1. The sales volume increases by 50 units. 2. The sales volume declines by 50 units. 3. The sales volume is 7,000 units. Frigised Rearet shifle 2 Wrime be formula pathad. whe for be dollar ales that are requised to earn a target profit off rivin. EXEFCISE 5 -7 Compute the Break Even Polnt. \{.06\}. Maxwa Prodacts usuihuter a single prodist, a woren busket whose selling price is $8 and whose sariable owi is 96 per aric, The cominosy's casently fixed ecpense is 55,500 . Peostial 1. Solve for the coryuary' b beck-even point is usit sales using the equation thethod. 2. Sive for the company'y becak-even point in sales dollars asing the equation method and the CM ratio. 3. Solve for the sorrpany's hreke-ven point in usit sales usine the formula method. EXFPCiSE 5-8 Compute the Margin of Safety [LDT) Neban Cerroration bs a disnisutor of a sun umbrella uned at resort hotels, Data concerinises next menibas bucger appeas belae: Cianipate the company's margin of wafety. Corepnite the conngany's margin of saferty as a perwencege of its sales. ExEfcise 59 Compute and Use the Degree of Operating Leverage 7LOH] 1. Cornpute the company's degree of operating leveraye. iocrease in sales. 1. Vitrify your estimate from part (2) abose by codstracting a tecal contributarei focinat incouthe statement for the compenty absuming a 10 a increwog in sale- EXERCISC 5-10 Compute the Broak-Even Point for a Multiproduct Company Lecky Prodacis markets two compuier gaimes: Hredator and Reymuay- A contribution formuis ioccuestatement for a recemt month for the fwo games appears belowa Bigurect. 1. Compute the overall contribution margin (CM) satio for the company. 2. Compute the overill heak-even poinl for the company in siles dollars. 3. Verify the overall breiek-eveit poinf for the compatay by constructing a conuritution format income statement showing the appropriate levets of sales for the two producrs. ExERClSE 5-11 Break-Even Analysis; Target Profit; Margin of Safety; CM Ratio [101,L03,L05,L06,L07] Pringle Company distributes a single product. The company's sales and cxpenses for as recent. mondh follow: All applicable exercises are available with McGraw-hill's Connect n Accounting. EXERCISE 5-1 Preparing a Contribution Format income Statement [L.01] Wheeler Corporation's most recent income statement follows: Required: Prepare a new contribution format incobis statement under each of the following conditions (consider cach case independently): 1. The sales volume increases by 50 units. 2. The sales volume declines by 50 units. 3. The sales volume is 7,000 units
