Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Make sure you fill in all Yellow cells. Yellow cells left blank will receive zero credit. 18 pm Problem G L. Anume that fixed costs

image text in transcribed
image text in transcribed
image text in transcribed
Make sure you fill in all Yellow cells. Yellow cells left blank will receive zero credit. 18 pm Problem G L. Anume that fixed costs of Celtics Company we $150.000 per year, variable costs $12 per unit, and selling price is $10 per unit. Determine the break-even point in sales in Celties Company Step 1: To compute the BE in Units we fint have to compute the Contribution Murtin (CM) per im Contra marine ale price variable con / un perut even in uns CM permit h. The sales of Niners Corporation last year mounted to 520.000.000, its variable costs were $6.000.000, and its fixed costs were $4,000,000. At what level of sale dollars would the Niners Corporation beak even! Niners Corporation Step 1: To compute the He w fint have to compute the Contribution Marin (CM) Contribution man sales price variable cost Step 2. To compare the Berlin Sales Dollars we fint have compute the Contribution Margia (CMRatio CM ore Varuosad CM Sales raken in Sales Dollar Feed Conta CM Hound to nearest cent2 decimal placed c. Answer each of the following questions labeled 1-4 based on the Niners Corporation from part b. 1. What would have been the net income of the Niners Corporation, if sales volume had been 10% higher but selling prices had remained unchanged? Use the con margin Income statement format. 2. What would have been the net income of the Niners Corporation, if variable costs had been 10% lower? Use the contribution margin income statement format. 3. What would have been the net income of the Niners Corporation, if fixed costs had been 10% lower? Use the contribution margin income statement format. 4. Determine the break-even point in sales dollars for the Niners Corporation on the basis of the data given in (2) and then in (3) c. Niners Corporation Scenarios 1. Sales VOLUME (not selling price) 10% higher Niners Corporation Contribution Margin Income Statement The first one is done for you. Sales 22,000,000 TON cose intole Variable Cost $ 6.600.000 tosincros in variable since sales UNITS increased, not soles price Contribution Margin S 15,400,000 Sales - Varble Cast Fixed Costs 4,000,000 Given Brem Income before taxes $ 11,400,000 CHF Cab 2. Variable Costs 10% lower Niners Corporation Contribution Margin Income Statement Sales Variable Cast Contribution Margin Fixed Costs Income before takes Original mountive in problem to decrease in variable costs Gm 3. Fixed Costs 10% lower Niners Corporation Contribution Manon Income Statement Celing mount problem Original amount in problem Sales Variable Cost Contribution Margin Fred Costs Income before taxes 10% dermed cost CM Out Problem G Alternate Problem D Exercise F Income before taxes CM-Fixed Costs 4. Breakeven point in sales dollars for Options 2 and 3 OPTION 2 Step 1: Compute the BE in Sales Dollars for Option 2 above. (Hint: the contribution margin was already calculated in the Income Statement above.) CM ratio CM Sales Breakeven in Sales Dollars [Round to Fixed Costs CM ratio OPTION 3 Step 1: Compute the BE in Sales Dollars for Option 3 above. (Hint: the contribution margin was already calculated in the Income Statement above.) CM ratio- CM Sales Breakeven in Sales Dollars [Round to Fixed Costs CM ratio S. Option Analysis: Should Niners Company keep things the same as in (b) or pursue pricing options 1, 2 or 3? Why? This Excel Worksheet was created by Amy Bohrer, CPA and is licensed under a Creative Commons Attribution 4.0 Interational Lic

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_2

Step: 3

blur-text-image_3

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

Executive Roadmap To Fraud Prevention And Internal Control Creating A Culture Of Compliance

Authors: Joel T. Bartow, Martin T. Biegelman

2nd Edition

1118004582, 9781118004586

More Books

Students also viewed these Accounting questions