Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please help and show all work, i will rate and thinbs up !!!!! Turi Company, operates at full capacity, sold 35,000 units at a price

please help and show all work, i will rate and thinbs up !!!!!
image text in transcribed
Turi Company, operates at full capacity, sold 35,000 units at a price of $90 per unit during the current year. Its Income Statement is a follow: Sales $3,150,000 Cost of goods sold 1.280,000 Gross Profit 1,870,000 Expenses Selling Expenses 320,000 Administrative Expense 620,000 Total Expense 940,000 Income from operations $960.000 The division of costs between variable and fixed is as follows: Variable Fixed Cost of Goods Sold 75% 25% Selling Expense 60% 40% Administrative Expenses 40% 60% Management is considering a plant expansion program for the following year that will permit an increase of $720,000 in yearly sales. The expansion will increase fixed costs by $270,000 but will not affect the relationship between between sales and variable costs. 1. Determine the total fixed costs and the total variable costs for the current year. 2. Determine (a) the unit variable costs and (b) the unit contribution margin for the current year. 3. Compute the break-even sales (units) for the current year. 4. Compute the break-even sales (units) under the proposed program for the following year. 5. Determine the number of sales (units) that would be necessary under the proposed program to realize the $930,000 of income from operations that was earned in the current year. 6. Calculate the Degree of Operating Leverage. 7. Determine the units to sell to produce an income of $1,050,000

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

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: James Jiambalvo

4th edition

9780470546888, 9780470333341, 470546883, 470333340, 978-0470578797

More Books

Students also viewed these Accounting questions