Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Carbex, Inc. produces cutlery sets out of high-quality wood and steel. The company makes a Standard set and a Deluxe set and sells them to

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Carbex, Inc. produces cutlery sets out of high-quality wood and steel. The company makes a Standard set and a Deluxe set and sells them to retail department stores throughout the country. The Standard set sells for $92, and the Deluxe set sells for $107. The variable expenses associated with each set are given below. Variable production costs sales commission (31 of sales price Standard Deluxe $31.00 $ 46.00 $ 28.52 5 33.17 The company's fixed expenses each month are: Advertising Depreciation Administrative 5121,000 $ 26,500 $71.000 Mory Parsons, the financial vice president, watches sales commissions carpfully and has noted that they have risen steadily over the last year. For this reason, she was shocked to find that even though sales have increased, profits for the current month-May-are down substantially from April Sales, in sets, for the last two months are given below: Standard Deluxe Total April 5,600 3.600 9,200 MAY 2.600 6.600 9.200 Required: 1-a. Prepare contribution format income statement for April, 1.b. Prepare contribution format income statement for May 3-a. Compute the break-even point in dollar sales for April 3-b. Would the break-even point in May be higher or lower than the break-even point in April? Carbex, Inc. Income Statement For April Standard Deluxe Amount % Amount % $ 515,200 100.0% $ 385,200 100.0 % Total Amount $ 900,400 100.0% Sales Variable expenses: Production Sales commission 173,600 159,712 33.7% 31.01% 165,600 119,412 42.1% 31.01% 339,200 279,124 37,3% 31.01% % % % % % 333,52 % 64 7% 35.3 % 285,012 $ 100,158 73.1 % 26.9 % 618,324 $ 282,076 68.3 % 31.7% $ 181,888 Total variable expenses Contribution margin Fixed expenses Advertising Depreciation 121,000 26,500 Total fixed expension 147.500 $ 134,576 Reg 10 > -51 Carbex, Inc. Income Statement For May Standard Deluxe Amount % Amount % $ 2,600 % $ 6,600 Total % Amount % $ 9,200 % Sales Variable expenses Salos Production 239,200 80,600 74,152 100.0 % 33.71% 310.01% % 706,200 303,600 218,922 100.0 % 43.01% 945,400 384.200 293,074 100.0 % 40.6% 31.01% % Sales commission 31.01% Total variable expenses 443.7 % 174.0% 171.6 % 393,952 $ (391,352) 1.228,722 $ (1.222.122) 1,622,674 S (1.613.474) Contribution loss (443.7) % (1740) % (171.6) % Fixed expenses Total fixed expenses 0 $ 1,013,476) Mary Parsons, the financial vice president, watches sales commissions carefully and has noted that they have risen steadily over the last year. For this reason, she was shocked to find that even though sales have increased, profits for the current month-May-are down substantially from April Sales, in sets, for the last two months are given below: April May Standard Deluxe 5,600 3,600 2,600 6,600 Total 9,200 9,200 Required: 1-a. Prepare contribution format income statement for April. 1-b. Prepare contribution format Income statement for May 3-a. Compute the break-even point in dollar sales for Aprili. 3-b. Would the break-even point in May be higher or lower than the break-even point in April? Complete this question by entering your answers in the tabs below. Reg 1A Reg 15 Reg 3A Reg 38 Compute the break-even point in dollar sales for April (Round intermediate percentage calculations to 1 decimal place and final answer to the nearest whole dollar) Brak even point in dollar sales $ 689,247 Reg 18 Req38 >

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_2

Step: 3

blur-text-image_3

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

Intermediate Accounting Volume 1

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy

13th Canadian Edition

1119740460, 978-1119740469

More Books

Students also viewed these Accounting questions

Question

discuss the importance of ethical practice for the HR profession;

Answered: 1 week ago

Question

reference your work in a credible way.

Answered: 1 week ago

Question

read in a critically evaluative way;

Answered: 1 week ago