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Blossom Company bottles and distributes B-Lite, a diet soft drink. The beverage is sold for 50 cents per 16-ounce bottle to retailers. For the year
Blossom Company bottles and distributes B-Lite, a diet soft drink. The beverage is sold for 50 cents per 16-ounce bottle to retailers. For the year 2022, management estimates the following revenues and costs. Sales $1,500,000 Selling expenses-variable $90,000 Direct materials 410,000 Selling expenses-fixed 50,000 Direct labor 330,000 Administrative expenses-variable 20,000 Manufacturing overhead-variable 350,000 Administrative expenses-fixed 40,000 Manufacturing overhead-fixed 150,000BLOSSOM COMPANY CVP Income Statement (Estimated) Total Net Income/(Loss) V $ V V V V V V V V V $\fCalculate variable cost per bottle. (Round variable cost per bottle to 3 decimal places, e.g. 0.251.) Variable cost per bottle $ e Textbook and Media Compute the break-even point in (1) sales units and (2) sales dollars. (Round answers to O decimal places, e.g. 1,225.) (1) Break-even point units (2) Break-even point $ eTextbook and Media Compute the contribution margin ratio and the margin of safety ratio. Contribution margin ratio Margin of safety ratio % eTextbook and Media Determine the sales dollars required to earn net income of $150,000. Required sales $ eTextbook and MediaIvanhoe Company reports the following operating results for the month of August: sales $315,000 (units 5,000); variable costs $213,000; and xed costs $71,600. Management is considering the following independent courses of action to increase net income. Compute the net income to be earned under each alternative. 1. Increase unit selling price by 10% with no change in total variable costs or sales volume. Net income $ 2. Reduce variable costs to 59% of sales. Net income $ 3. Reduce xed costs by $24,000. Net income 35 Which course of action will produce the highest net income? Wildhorse Company had sales in 2021 of $1,950,000 on 60,000 units. Variable costs totaled $1,170,000, and fixed costs totaled $650,000. A new raw material is available that will decrease the unit variable costs by 20% (or $3.90). However, to process the new raw material, fixed operating costs will increase by $130,000. Management feels that one half of the decline in the unit variable costs should be passed on to customers in the form of a sales price reduction. The marketing department expects that this sales price reduction will result in a 5% increase in the number of units sold. (a) Prepare a projected CVP income statement for 2022, assuming the changes have not been made. (Round per unit cost to 2 decimal places, e.g. 5.25 and all other answers to O decimal places, e.g. 1,225.) WILDHORSE COMPANY CVP Income Statement Total Per Unit $ $ V $ $ (b) Prepare a projected CVP income statement for 2022, assuming that changes are made as described. (Round per unit cost to 2 decimal places, e.g. 5.25 and all other answers to O decimal places, e.g. 1,225.) ORSE COMPANY CVP Income Statement Total Per Unit $ $ $ VCullumber Inc. had a bad year in 2021. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling 67,200 units of product: net sales $1,680,000; total costs and expenses $1,877,400; and net loss $197,400. Costs and expenses consisted of the following. Total Variable Fixed Cost of goods sold $1,317,120 $882,000 $435,120 Selling expenses 434,280 77,280 357,000 Administrative expenses 126,000 48,720 77,280 $1,877,400 $1,008,000 $869,400 Management is considering the following independent alternatives for 2022. 1. Increase unit selling price 25% with no change in costs and expenses. 2. Change the compensation of salespersons from fixed annual salaries totaling $168,000 to total salaries of $33,600 plus a 5% commission on net sales. 3. Purchase new high-tech factory machinery that will change the proportion between variable and fixed cost of goods sold to 50:50. (a) Compute the break-even point in sales dollars for 2021. (Round contribution margin ratio to 4 decimal places e.g. 0.2512 and final answer to O decimal places, e.g. 2,510.) Break-even point $ (b) Compute the break-even point in sales dollars under each of the alternative courses of action for 2022. (Round contribution margin ratio to 3 decimal places e.g. 0.251 and final answers to O decimal places, e.g. 2,510.) Break-even point 1. Increase selling price $ 2. Change compensation 3. Purchase machinery Which course of action do you recommend? VSandhill Corporation sells three different models of a mosquito "zapper." Model A12 sells for $60 and has unit variable costs of $42. Model 322 sells for $120 and has unit variable costs of $84' Model C124 sells for $480 and has unit variable costs of $360. The sales mixias a percentage of total units} of the three models isA12, 60%; 822, 15%; and C 124. 25%. What is the weightedaverage u nit contribution margin? (Round answer to 2 decimal plm, 8.3. 15.50.) WeightedAverage Unit Contribution Margin $ Sheridan Corporation sells three different models of a mosquito "zapper." Model A12 sells for $46 and has unit variable costs of $32.20. Model B22 sells for $92 and has unit variable costs of $64.40. Model C124 sells for $368 and has unit variable costs of $276. The sales mix (as a percentage of total units) of the three models is A12, 60%; B22, 15%; and C124, 25%. If the company has fixed costs of $269,192, how many units of each model must the company sell in order to break even? (Round Per unit values to 2 decimal palces, e.g. 15.25 and final answers to 0 decimal places, e.g. 5,275.) Model A12 B22 C124 Total break-even point unitsIvanhoe Candle Supply makes candles. The sales mix (as a percentage of total dollar sales) of its three product lines is birthday candles 30%, standard tapered candles 55%, and large scented candles 15%. The contribution margin ratio of each candle type is shown below. Candle Type Contribution Margin Ratio Birthday 20% Standard tapered 30% Large scented 50% What is the weighted-average contribution margin ratio? Weighted-average contribution margin ratio eTextbook and Media If the company's fixed costs are $457,500 per year, what is the sales dollar amount of each type of candle that must be sold to break even? Birthday Standard tapered Large scented Product line break-even $ $ point eTextbook and Media
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