Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Lubin, Inc. manufactures and sells a reusable grocery shopping bag. The following are selected sales and cost data for the last quarter: Selling price $80
Lubin, Inc. manufactures and sells a reusable grocery shopping bag. The following are selected sales and cost data for the last quarter:
Selling price $80 per unit
Number of units sold 12,000 units
Contribution margin ratio 40%
Fixed costs $320,000
Required:
- Compute the total variable costs incurred for the quarter.
- What is the quarterly break-even point in the units sold and in sales dollars?
- Prepare a contribution income statement for the quarter?
- The company wants to earn target operating income of $60,000. How many units must be sold to achieve desired operating income?
- If number of units sold is 15,000,
- What is the margin of safety in units?
- What is the margin of safety in dollars?
- What is the margin of safety in percentage?
- If sales were reduced 30%, would Lubin still make money? Why?
- Company has decided to automate its sewing process. The automation will reduce direct labor costs by $8 per bag produced and increase fixed costs by $80,000 per quarter.
- Compute the new break-even point in units sold and sales dollars.
- How many units must be sold to achieve an operating income of $200,000 when automation is implemented?
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