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Break - Even Sales Under Present and Proposed ConditionsKearney Company, operating at full capacity, sold 9 9 , 7 0 0 units at a price
BreakEven Sales Under Present and Proposed ConditionsKearney Company, operating at full capacity, sold units at a price of $ per unit during Y Its income statement for Y is as follows:Line Item DescriptionAmountSales $ Cost of goods sold Gross profit $ Expenses: Selling expenses$ Administrative expenses Total expenses Operating income $ The division of costs between fixed and variable is as follows:Line Item DescriptionFixedVariableCost of goods soldSelling expensesAdministrative expensesManagement is considering a plant expansion program that will permit an increase of $ units at $ per unit in yearly sales. The expansion will increase fixed costs by $ but will not affect the relationship between sales and variable costs.Instructions: Determine for Y the total fixed costs and the total variable costs.Total fixed costs fill in the blank of $Total variable costs fill in the blank of $ Determine for Ya the unit variable cost and b the unit contribution margin.a Unit variable cost fill in the blank of $per unitb. Unit contribution margin fill in the blank of $per unit Compute the breakeven sales units for Yfill in the blank of units Compute the breakeven sales units under the proposed program.fill in the blank of units Determine the amount of sales units that would be necessary under the proposed program to realize the $ of operating income that was earned in Yfill in the blank of units Determine the maximum operating income possible with the expanded plant.fill in the blank of $ If the proposal is accepted and sales remain at the Y level, what will be the operating income or loss for Yfill in the blank of $ fill in the blank of Assuming a lack of market research, disadvantages for expanding the plant include all of the following except:a The breakeven point increases.b The sales necessary to maintain the current income from operations must increase in excess of Y sales.c If future sales remain at the Y level, the income from operations will decline.d The maximum income from operations possible with the expanded plant is less than the current income from operations.Feedback AreaFeedback Multiply the percentages for fixed and variable costs by each cost Variable costs divided by number of units equals unit variable cost.Sales minus variable costs divided by units equals unit contribution margin per unit Sales minus variable costs equals contribution margin.Fixed costs divided by unit contribution margin equals breakeven point Sales minus variable costs equals contribution margin. Fixed costs divided by unit contribution margin equals breakeven pointFixed costs Target profit divided by unit contribution margin equals sales units Sales minus fixed and variable costs equals operating income Subtract the additional fixed costs from the operating income Consider your analysis in questions when answering this question.Check My Work
BreakEven Sales Under Present and Proposed ConditionsKearney Company, operating at full capacity, sold units at a price of $ per unit during Y Its income statement for Y is as follows:Line Item DescriptionAmountSales $ Cost of goods sold Gross profit $ Expenses: Selling expenses$ Administrative expenses Total expenses Operating income $ The division of costs between fixed and variable is as follows:Line Item DescriptionFixedVariableCost of goods soldSelling expensesAdministrative expensesManagement is considering a plant expansion program that will permit an increase of $ units at $ per unit in yearly sales. The expansion will increase fixed costs by $ but will not affect the relationship between sales and variable costs.Instructions: Determine for Y the total fixed costs and the total variable costs.Total fixed costs fill in the blank of $Total variable costs fill in the blank of $ Determine for Ya the unit variable cost and b the unit contribution margin.a Unit variable cost fill in the blank of $per unitb. Unit contribution margin fill in the blank of $per unit Compute the breakeven sales units for Yfill in the blank of units Compute the breakeven sales units under the proposed program.fill in the blank of units Determine the amount of sales units that would be necessary under the proposed program to realize the $ of operating income that was earned in Yfill in the blank of units Determine the maximum operating income possible with the expanded plant.fill in the blank of $ If the proposal is accepted and sales remain at the Y level, what will be the operating income or loss for Yfill in the blank of $ fill in the blank of Assuming a lack of market research, disadvantages for expanding the plant include all of the following except:a The breakeven point increases.b The sales necessary to maintain the current income from operations must increase in excess of Y sales.c If future sales remain at the Y level, the income from operations will decline.d The maximum income from operations possible with the expanded plant is less than the current income from operations.Feedback AreaFeedback Multiply the percentages for fixed and variable costs by each cost Variable costs divided by number of units equals unit variable cost.Sales minus variable costs divided by units equals unit contribution margin per unit Sales minus variable costs equals contribution margin.Fixed costs divided by unit contribution margin equals breakeven point Sales minus variable costs equals contribution margin. Fixed costs divided by unit contribution margin equals breakeven pointFixed costs Target profit divided by unit contribution margin equals sales units Sales minus fixed and variable costs equals operating income Subtract the additional fixed costs from the operating income Consider your analysis in questions when answering this question.Check My Work
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