Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Hello I am in Managerial Accounting and I am terrible at it and am hoping I could get help with this question. The Central Valley

Hello I am in Managerial Accounting and I am terrible at it and am hoping I could get help with this question.

image text in transcribed

image text in transcribed

The Central Valley Company is a manufacturing firm that produces and sells a single product. The company's revenues and expenses for the last four months are given below. Central Valley Company Comparative Income Statement March April 5,500 May 6,750 June Sales in units Sales revenue Less: Cost of goods sold 8,000 $750,000 $687,500 $843,750 $1,000,000 510,000 6,000 397,500 371,250 438,750 $352,500 $316,250 $405,000 490,000 Gross margin Less: Operating Expenses Shipping expense Advertising expense Salaries and commissions Insurance expense Amortization expense $ 63,500 54,000 $ 67,000 66,000 85,000 175,500 14,000 47,000 85,000 163,800 14,000 47,000 85,000 138,000 14,000 47,000 85,000 166,500 14,000 47,000 Total operating expenses $373,300 $338,000 $379,500 $387,500 Net income S (20,800) (21,750) S 25,500 102,500 Required 1. Management is concerned about the losses experienced during the spring and would like to know more about the cost behaviour. Develop a cost equation for each of the costs. (Do not round intermediate calculations. Round "Per Unit" answers to 2 decimal places.) Cost of goods sold Shipping Salaries & commission per unit per unit per unit 2. Assume that fixed costs are incurred uniformly throughout the year. Compute the annual break-even sales, and the profit if 76,000 units are sold during the year. (Round "Break-even sales" answer to nearest whole number.) Break-even sales units Annual profit (76,000 units) 3. Calculate the change in profit if the selling price were reduced by $9.0 each and annual sales were to increase by 7,000 units. 4. Determine the change in profit if the company were to increase advertising by $110,000 and if this were to increase sales by 7,000 units

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

Statistical Sampling And Risk Analysis In Auditing

Authors: Peter Jones

1st Edition

1138263214, 978-1138263215

More Books

Students also viewed these Accounting questions

Question

Create a Fishbone diagram with the problem being coal "mine safety

Answered: 1 week ago

Question

What is the role of the Joint Commission in health care?

Answered: 1 week ago