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Need help with these two question for my Buisness/Finance Class Cornerstone Exercise 16.6 (Algorithmic) Break-Even Units and Sales Revenue: Margin of Safety Dupli-Pro Copy Shop

Need help with these two question for my Buisness/Finance Class

image text in transcribed Cornerstone Exercise 16.6 (Algorithmic) Break-Even Units and Sales Revenue: Margin of Safety Dupli-Pro Copy Shop provides photocopying service. Next year, Dupli-Pro estimates it will copy 3,100,000 pages at a price of $0.06 each in the coming year. Product costs include: Direct materials $0.009 Direct labor $0.003 Variable overhead $0.001 Total fixed overhead $92,540 There is no variable selling expense; fixed selling and administrative expenses total $40,000. Required: In your computations that involve the contribution margin ratio, do not round the ratio. 1. Calculate the break-even point in units. units 2. Calculate the break-even point in sales revenue. $ 3. Calculate the margin of safety in units for the coming year. units 4. Calculate the margin of safety in sales revenue for the coming year. $ 5. What if the total selling and administrative expenses are reduced to $25,900? Recalculate the following: a. Break-even point in units units b. Break-even point in sales revenue $ c. Margin of safety in units for the coming year d. Margin of safety in sales revenue for the coming year units $ Cornerstone Exercise 16.7 (Algorithmic) Degree of Operating Leverage, Percent Change in Profit Ringsmith Company is considering two different processes to make its productprocess 1 and process 2. Process 1 requires Ringsmith to manufacture subcomponents of the product in-house. As a result, materials are less expensive, but fixed overhead is higher. Process 2 involves purchasing all subcomponents from outside suppliers. The direct materials costs are higher, but fixed factory overhead is considerably lower. Relevant data for a sales level of 27,000 units follow: Process 1 Process 2 Sales $7,398,000 $7,398,000 Varoable expenses 2,295,000 3,996,000 Contribution margin $5,103,000 $3,402,000 Less total fixed expenses 3,605,300 1,455,400 Operating income $1,497,700 $1,946,600 Unit selling price $274 $274 Unit variable cost $85 $148 Unit contribution margin $189 $126 Required: 1. Compute the degree of operating leverage for each process. Round your answers to one decimal place. Use the rounded answers in subsequent calculations. Process 1 Process 2 2. Suppose that sales are 20 percent higher than budgeted. By what percentage will operating income increase for each process? Process 1 % Process 2 % What will be the increase in operating income for each system? Round your answers to the nearest dollar. Process 1 $ Process 2 $ What will be the total operating income for each process? Round your intermediate calculations and final answers to the nearest dollar. Use the rounded answers in subsequent calculations. Process 1 $ Process 2 $ 3. What if unit sales are 10 percent lower than budgeted? By what percentage will operating income decrease for each process? Process 1 % Process 2 % What will be the total operating income for each process? Round your answers to the nearest dollar. Process 1 $ Process 2 $

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