Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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

Accounting

Authors: Charles T. Horngren, Walter T. Harrison Jr., M. Suzanne Oliv

9th Edition

130898414, 9780132997379, 978-0130898418, 132997371, 978-0132569309

More Books

Students also viewed these Accounting questions