Question
Presented below is the income statement of Clorox Inc. which represents the operating results for the current fiscal year ending June 30, 2023. Clorox Inc.
Presented below is the income statement of Clorox Inc. which represents the operating results for the current fiscal year ending June 30, 2023. Clorox Inc. had sales of 3,700 tons of product during the current year. Consider each question's situation separately.
Sales | $2,960,000 | |
Variable costs | ||
Manufacturing | $1,036,000 | |
Selling costs | $592,000 | |
Total variable costs | $1,628,000 | |
Contribution margin | $1,332,000 | |
Fixed Costs | ||
Manufacturing | $355,200 | |
Selling costs | $384,800 | |
Administration | $148,000 | |
Total fixed costs | $888,000 | |
Operating Profit | $444,000 |
Do not enter dollar signs or commas in the input boxes. Round your answers to the nearest whole number. For Unit calculations round your answers up to the nearest whole number. a) What is the break even volume in tons of product for the year? Break even Point: Answer tons b) If the sales volume is estimated to be 4,000 tons next year, and the prices and costs stay at the same levels and amounts, what is the expected operating profit? Contribution margin: $Answer Fixed Costs: $Answer Operating Profit: $Answer c) Ignoring your previous answers, assume that Clorox Inc. plans to market its product in a new territory. Clorox Inc. estimates that an advertising and promotion program costing $66,000 annually would need to be undertaken for the next two or three years. An additional $70 per ton sales commission would be required. How many tons would have to be sold in the new territory to maintain Clorox Inc.'s current operating profit. Additional Fixed costs: $Answer New CM per unit: $Answer per ton Additional Sales Quantity: Answer tons Round your answers to 2 decimal places. d) Ignoring your previous answers, assume that Clorox Inc. estimates that the per ton selling price will decline 10% next year. Variable costs will increase $100.00 per ton and the fixed costs will not change. To keep the same operating profit of $444,000 next year, what must be the new sales amount? New Selling Price: $Answer per ton New Variable Costs: $Answer per ton New Contribution Margin: Answer per ton Operating Profit: $Answer Fixed Costs: $Answer Contribution Margin: $Answer New CM rate: Answer% New Sales: $Answer
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