Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Hello, can someone please help me. I'm new to accounting and i'm having lots of trouble with these questions and i''m not sure how to

Hello, can someone please help me. I'm new to accounting and i'm having lots of trouble with these questions and i''m not sure how to solve them. i would really really appreciate your help.

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed
2 . Value : 10.00 points Problem 8 - 5 Various CVP Questions : Break - Even Point ; Cost Structure ; Target Sales ( LO1 - CC2 , 3; 102 - CC 5 , 6 , 7) Tyrene Products manufactures recreational equipment . One of the company's products , a skateboard , sells for $37 . The skateboards are manufactured in an antiquated plant that relies heavily on direct labour workers . Thus , variable costs are high , totalling $25. 90 per skateboard , of which 70% is direct labour cost . Over the past year the company sold 43, 000 skateboards , with the following operating results :" Sales ( 43, 000 skateboards) $ 1 , 591 , 000 Variable expenses 1 , 1 13, 700 Contribution margin 47 7, 300 Fixed Expenses 27 7. 500 Net operating income $ 195, 8.00 Management is anxious to maintain and perhaps even improve its present level of income from the skateboards . Required :` la . Compute the GM ratio and the break-even point in skateboards . " Do not round intermediate calculations . Round your answer to the nearest whole number . !" @ Answer is complete and correct . Contribution margin 30 0 | %/0 Unit sales to break - even point 25, 000 0| skateboards16. Compute the degree of operating leverage at last year's level of sales . ( Round your answer to 2 decimal places . ` Answer is complete and correct . Degree of operating leverage 2.39 0 2 . Due to an increase in labor rates , the company estimates that variable costs will increase by $ 1.65 per skateboard next year . If this change takes place and the selling price per skateboard remains constant at 537 . 00 , what will be the new CM ratio and the new break-even point in skateboards ? ( Round your* intermediate calculations and the " Contribution margin " answer to 2 decimal places and other answer to the nearest whole number ." @ Answer is complete and correct . Contribution margin 25 @| %10 Unit sales to break - even point 30, 000 1\\ skateboards* 3 . Refer to the data in 12) above . If the expected change in variable costs takes place , how many skateboards will have to be sold next year to earn the same net operating income , $149 , 800 , as last year ? I Do not round intermediate calculations . Round your answer to the nearest whole number . ) @ Answer is complete and correct . Number of skateboards 51 , 600 04 . Refer again to the data in 12) above . The president has decided that the company may have to raise the selling price of its skateboards . If Tyrene Products wants to maintain the same CM ratio as last year what selling price per skateboard must it charge next year to cover the increased labor costs ? ( Do not round intermediate calculations . Round your answer to 2 decimal places ." @ Answer is complete but not entirely correct . $ Selling price 39.6513 5 . Refer to the original data . The company is considering the construction of a new , automated plant . The new plant would slash variable costs by 20%'6 , but it would cause fixed costs to increase by 92% . If the new plant is built , what would be the company's new GM ratio and new break-even point in skateboards ? ( Round your intermediate calculations and the " Contribution margin " answer to 2 decimal places and other answer to the nearest whole number . @ Answer is complete but not entirely correct . Contribution margin 440 | %10 Unit sales to break - even point 23, 564 3\\ skateboards 6. Refer to the data in 15 ) above* a . If the new plant is built , how many skateboards will have to be sold next year to earn the same net operating income , $199, 800 , as last year ? I Do not round intermediate calculations . Round your answer to the nearest whole number . ! @ Answer is complete but not entirely correct . Number of Skateboard s 35, 836 13b-1.Assume that the newI plant is constructed and that next year the company manufactures and sells 43,!'J skateboards [the same number as sold last year}. Prepare a contribution format income statement. [Input all amounts as positive values except losses which should be indicated by minus sign. } Sales $ 1,591. Variable expenses BQGHED o 9 Answer h complete but not entirely correct. Contribution margin memo Fixed expenses 383,616 a Net operating income [loss] 3 316.424 I; Compute the degree of operating leverage. [Round your answer to 2 decimal places.) 9 Answer In: complete but not entirely correct

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

Financial Accounting

Authors: Robert Kemp, Jeffrey Waybright

3rd Edition

133427889, 978-0133427882

More Books

Students also viewed these Accounting questions

Question

8. What values do you want others to associate you with?

Answered: 1 week ago