Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Fill in the missing data for each of the following independent cases. (Ignore income taxes.) (Do not round intermediate calculations. Leave no cells blank -
Fill in the missing data for each of the following independent cases. (Ignore income taxes.) (Do not round intermediate calculations. Leave no cells blank - be certain to enter "0" wherever required.) College Pizza delivers pizzas to the dormitories and apartments near a major state university. The company's annual xed expenses are $62,000. The sales price ofa pizza is $10, and it costs the company $6 to make and deliver each pizza. (In the following requirements, ignore income taxes.) Required: 1. Using the contributionmargin approach, compute the company's breakeven point in units (pizzas). 2. What is the contributionmargin ratio? (Round your answer to 1 decimal place.) 3. Compute the breakeven sales revenue. Use the contributionmargin ratio in your calculation. 4. How many pizzas must the company sell to earn a target profit of $68,000? Use the equation method. Breakeven point pizzas Contributionmargin ratio Breakeven point sales dollars rP'P-'Nf' Numbel of pizzas Rosario Company, which is located in Buenos Aires, Argentina, manufactures a component used in farm machinery. The firm's fixed costs are 3,600,000 p per year. The variable cost of each component is 1.400 p, and the components are sold for 3,200 p each. The company sold 5,900 components during the prior year. (,0 denotes the peso, Argentina's national currency. Several countries use the peso as their monetary unit. On the day this exercise was written, Argentina's peso was worth 0.104 U.S. dollar. In the following requirements, ignore income taxes.) Required: 1. Compute the breakeven point in units. (Round your answer to the nearest whole number.) 2. What will the new break-even point be if fixed costs increase by 15 percent? (Round your answer to the nearest whole number.) 3. What was the company's net income forthe prior year? 4. The sales manager believes that a reduction in the sales price to 2.700 p will result in orders for 700 more components each year. What will the breakeven point be if the price is changed? (Round your answer to the nearest whole number.) 5. Should the price change discussed in requirement 4 be made? Breakeven point components components ,0 components New breakeven point Net income New breakeven point .U'PP'N.' Should the price change discussed in requirement 4 be made? T
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored 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