Answered step by step
Verified Expert Solution
Question
00
1 Approved Answer
During 2020, the company sold $4,000,000 of toys, earned a contribution margin of $750,000, and had net income of $400,000. Variable cost of manufacturing per
During 2020, the company sold $4,000,000 of toys, earned a contribution margin of $750,000, and had net income of $400,000. Variable cost of manufacturing per toy was $2.50. During 2020, the company incurred $3,000,000 in selling costs - all variable. There were no merchandise or in-process inventories in 2020. Required 5 a. Calculate the break-even quantity and the margin of safety for 2020, in units, Break even Margin of Safety Calculations here: 4 b. The president of the company wants better control over selling costs. He has asked the controller to investigate a proposal to create a sales department. This would add $400,000 in salaries and rent, but variable selling costs would be reduced by $4 per toy sold. Calculate the break-even sales quantity if the proposal to create a sales department is implemented. Answer here: Calculations here: During 2020, the company sold $4,000,000 of toys, earned a contribution margin of $750,000, and had net income of $400,000. Variable cost of manufacturing per toy was $2.50. During 2020, the company incurred $3,000,000 in selling costs - all variable. There were no merchandise or in-process inventories in 2020. Required 5 a. Calculate the break-even quantity and the margin of safety for 2020, in units, Break even Margin of Safety Calculations here: 4 b. The president of the company wants better control over selling costs. He has asked the controller to investigate a proposal to create a sales department. This would add $400,000 in salaries and rent, but variable selling costs would be reduced by $4 per toy sold. Calculate the break-even sales quantity if the proposal to create a sales department is implemented. Answer here: Calculations here
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started