Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Exercise 4-27 Break-Even Units, Contribution Margin Ratio, Multiple-Product Break- Even, Margin of Safety, Degree of Operating Leverage Burton Inc.'s projected operating income (based on sales

image text in transcribedimage text in transcribed

Exercise 4-27 Break-Even Units, Contribution Margin Ratio, Multiple-Product Break- Even, Margin of Safety, Degree of Operating Leverage Burton Inc.'s projected operating income (based on sales of 350,000 units) for the coming year is as follows: Total Sales Less: Variable expenses Contribution margin Less: Fixed expenses Operating income $8,400,000 6,720,000 1,680,000 1,512,000 $ 168,000 Complete Exercise 4-27, and provide the information required below. NOTE: for the format of numeric entries, see Exercise 4-24, Question 1, above. Required: 1. (a) Variable cost per unit is dollars. (b) Contribution margin per unit is A dollars. (c) Contribution margin ratio is percent. (d) Break-even is A units. (e) Break-even is A in sales dollars. 2. The number of units required to reach a target income of $300,000 is A units. 3. Additional operating income that Rad-Brad's would earn if sales were $50,000 more than expected would be A dollars. 4. The margin of safety in units is A units. 5. The degree of operating leverage is 6. The new operating income if sales are 10 percent higher than expected would be [j] dollars. A

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

Essentials Of Internal Auditing CIA Part 1 2021

Authors: Muhammad Zain

1st Edition

B09B36MRH2, 979-8542949130

More Books

Students also viewed these Accounting questions

Question

b. What groups were most represented? Why do you think this is so?

Answered: 1 week ago