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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 !!!!!
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
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