Master Inc. is a leading producer of glass panels for the construction industry. The annual income...
Fantastic news! We've Found the answer you've been seeking!
Question:
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/05/6659e913cccb7_4036659e913578cb.jpg)
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/05/6659e9147ed59_4046659e9140f34a.jpg)
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/05/6659e9153df9c_4046659e914d42b8.jpg)
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/05/6659e915ebbc1_4056659e91579582.jpg)
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/05/6659e916b9a1a_4066659e9164c75d.jpg)
Transcribed Image Text:
Master Inc. is a leading producer of glass panels for the construction industry. The annual income statement of Master Inc. for year ended 31 December 2021 were as follows: Sales revenue (60,000 units) $3,600,000 Less: Cost of goods sold Direct materials $480,000 Direct labour $600,000 Variable manufacturing overheads $120,000 Fixed overheads $300.000 $1.500.000 $2,100,000 Less: Selling & administrative expenses Sales commission (% of sales) Fixed selling & admin expenses $288,000 $420,000 $ 708,000 $1,392.000 Net operating income Required: (Treat each case independently) 1) Compute the break-even point in units and in sales dollars. What is the current margin of safety in sales dollars. (8 marks) 2) If Master Inc. believes that they are able to earn a targeted profit of $1,500,000 next year, how many glass panels must they sell to achieve this target. (2 marks) 3) Using the answers in Q1 and Q2, explain why cost-volume-profit analysis can be useful to management for planning and decision making. (4 marks) Master Inc. is a leading producer of glass panels for the construction industry. The annual income statement of Master Inc. for year ended 31 December 2021 were as follows: Sales revenue (60,000 units) $3,600,000 Less: Cost of goods sold Direct materials $480,000 Direct labour $600,000 Variable manufacturing overheads $120,000 Fixed overheads $300.000 $1.500.000 $2,100,000 Less: Selling & administrative expenses Sales commission (% of sales) Fixed selling & admin expenses $288,000 $420,000 $ 708,000 $1,392.000 Net operating income Required: (Treat each case independently) 1) Compute the break-even point in units and in sales dollars. What is the current margin of safety in sales dollars. (8 marks) 2) If Master Inc. believes that they are able to earn a targeted profit of $1,500,000 next year, how many glass panels must they sell to achieve this target. (2 marks) 3) Using the answers in Q1 and Q2, explain why cost-volume-profit analysis can be useful to management for planning and decision making. (4 marks)
Expert Answer:
Posted Date:
Students also viewed these accounting questions
-
Why do many Carmex product prices end in 9? What type of pricing is this called? What should happen to demand when this approach is used?
-
Early in September 1983, it took 245 Japanese yen to equal $1. Nearly 25 years later, in May 2008, that exchange rate had fallen to 103.5 yen to $1. Assume that the price of a Japanese-manufactured...
-
A company purchased $6,000 worth of supplies in August and recorded the purchase in the Supplies account. On August 31, the fiscal year-end, the physical count of supplies indicates the cost of...
-
Sunny Lawns Services purchased a new vehicle on 1 July 2020. Thevehicle cost $67,000; the vehicle needed to be fitted with anattached toolbox to make it useful for the business costing $5,550.With 2...
-
How do global power dynamics shape international relations, and what impact do these dynamics have on the balance of power among nation-states ?
-
(paragraph form each question) how do you formulate a strategy?, how do you implement a strategy? how do you evaluate a strategy?
-
Discuss the Now What Do I Do With Brad and Kerry case study. In doing so, please address the following areas: Identify the problem: Define the problem in human resource terms. Diagnose the cause(s):...
-
1. What role do traits, behaviors, and the situation (contingency theories) play in leadership effectiveness? Summarize what we know about these theories. 2. Describe 3 different situations in which...
-
How do you think learning report writing help you in your future work? Learning report writing now will help me in future as I am going to likely have to write lots of reports. While I know how to...
-
This is the Buckeye National Bank case. Questions: 1. Describe the impact of the Bank's business strategy on its financials. 2. Assume that the depreciation expense on the customer call center...
-
Explain the problems in the tort system and identify the proposals for change
-
Explain the obligations of property owners to those on their property
-
Identify the classes of property thatmay be insured under the scheduled coverage endorsement to the homeowners forms
![Mobile App Logo](https://dsd5zvtm8ll6.cloudfront.net/includes/images/mobile/finalLogo.png)
Study smarter with the SolutionInn App