Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Break-Even Units, Contribution Margin Ratio, Multiple-Product Breakeven, Margin of Safety, Degree of Operating Leverage Jellico Inc.'s projected operating income (based on sales of 450,000 units)

image text in transcribed

image text in transcribed

Break-Even Units, Contribution Margin Ratio, Multiple-Product Breakeven, Margin of Safety, Degree of Operating Leverage Jellico Inc.'s projected operating income (based on sales of 450,000 units) for the coming year is as follows: Total Sales $ 12,150,000 Total variable cost 7,654,500 Contribution margin $ 4,495,500 2,719,278 Total fixed cost Operating income $ 1,776,222 Required: 1(a). Compute variable cost per unit. Enter your answer to the nearest cent. $ per unit 1(b). Compute contribution margin per unit. Enter your answer to the nearest cent. $ per unit 1(c). Compute contribution margin ratio. 1(d). Compute break-even point in units. units 1(c). Compute contribution margin ratio. 1(d). Compute break-even point in units. units 1(e). Compute break-even point in sales dollars. 2. How many units must be sold to earn operating income of $357,642? units 3. Compute the additional operating income that Jellico would earn if sales were $50,000 more than expected. 4. For the projected level of sales, compute the margin of safety in units, and then in sales dollars. Margin of safety in units units Margin of safety in sales dollars $ 5. Compute the degree of operating leverage. Round your answer to one decimal place. 6. Compute the new operating income if sales are 10% higher than expected. Enter your answer to the nearest whole dollar. $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Wiley CPA Exam Review Auditing And Attestation 2011

Authors: Patrick R. Delaney, O. Ray Whittington

8th Edition

0470554347, 978-0470554340

More Books

Students also viewed these Accounting questions

Question

The nature and importance of the global marketplace.

Answered: 1 week ago