Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Help please Question 1) Summer Manufacturing company has just completed its income statement for the year 2020. Sales (400.000 units) $20.000.000 Manufacturing costs: Material $1.700.000

Help please

image text in transcribed

Question 1) Summer Manufacturing company has just completed its income statement for the year 2020. Sales (400.000 units) $20.000.000 Manufacturing costs: Material $1.700.000 Labor 1.600.000 Fixed overhead 2.650.000 Variable overhead 4.050.000 Selling costs: Fixed 3.400.000 Variable 1.900.000 Administrative costs: Fixed 1.750.000 Variable 350.000 Total costs 17.400.000 Profit $2.600.000 Required: 1. Compute the contribution margin ratio and breakeven point (in units and in dollars) (10 points) 2. Using the same data, you want to increase your sales for the next year without changing selling price compute the profit if planned sales are ...........units. In this situation what will be the margin of safety? Calculate and explain briefly. (15 points) (You will fill in the blanks, it will be your own assumption. Please write your OWN data) 3. Using the same data given in the question (income statement for the year 2020) for the next year company is planning revise its profit plan totally. Assuming: Selling price will increase to $..... and variable cost will increase to $......, depending your own answers, in this situation what would be the new breakeven point (in units and in dollars) and contribution margin ratio? (Sales amount and fixed costs are not changing) (20 points) (You will fill in the blanks, it will be your own assumption. Please write your OWN data)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Managerial Accounting

Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer

12th Edition

9780073526706

Students also viewed these Accounting questions