Presented is the current year contribution income statement of Grafton Products GRAFTON PRODUCTS Contribution Income Statement...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Presented is the current year contribution income statement of Grafton Products GRAFTON PRODUCTS Contribution Income Statement For Year Ended December $ 2,625,000 Sales (15,000 units) Less variable costs Cost of goods sold Selling and administrative $ 1,275,000 150,000 (1,425,000) 1,200,000 Contribution margin Less fixed costs Manufacturing overhead 685,000 Selling and administrative Net income 330,000 (1,015,000) $ 185,000 Next year, Grafton expects an increase in variable manufacturing costs of $10 per unit and in fixed manufacturing costs of $30,000. (a) If sales for the next year remain at 15,000 units, what price should Grafton charge to obtain the same profit as last year? Round to the nearest cent. $ 187 (b) Management believes that sales can be increased to 18,000 units if the selling price is lowered to $165. What would be the excepted profit (or loss) as a result of this action? Use a negative sign with your answer, if appropriate. $ (325,000) (c) After considering the expected increases in costs, what sales volume is needed to earn a pretax profit of $200,000 with a unit selling price of $165? Round to the nearest unit. 20,750 Check Presented is the current year contribution income statement of Grafton Products GRAFTON PRODUCTS Contribution Income Statement For Year Ended December $ 2,625,000 Sales (15,000 units) Less variable costs Cost of goods sold Selling and administrative $ 1,275,000 150,000 (1,425,000) 1,200,000 Contribution margin Less fixed costs Manufacturing overhead 685,000 Selling and administrative Net income 330,000 (1,015,000) $ 185,000 Next year, Grafton expects an increase in variable manufacturing costs of $10 per unit and in fixed manufacturing costs of $30,000. (a) If sales for the next year remain at 15,000 units, what price should Grafton charge to obtain the same profit as last year? Round to the nearest cent. $ 187 (b) Management believes that sales can be increased to 18,000 units if the selling price is lowered to $165. What would be the excepted profit (or loss) as a result of this action? Use a negative sign with your answer, if appropriate. $ (325,000) (c) After considering the expected increases in costs, what sales volume is needed to earn a pretax profit of $200,000 with a unit selling price of $165? Round to the nearest unit. 20,750 Check
Expert Answer:
Answer rating: 100% (QA)
a If sales remain at 15000 units but variable manufacturing costs increase by 10unit and fixed manuf... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-0618777181
8th Edition
Authors: Susan V. Crosson, Belverd E. Needles
Posted Date:
Students also viewed these accounting questions
-
Prepare the Balance Sheet from the Adjusted Trial Balance and Statement of Owners Equity. Within each section of the statement, enter the accounts, the account balances and calculate ending balances....
-
Presented is the 2012 contribution income statement of Colgate products. Sales (12,000)..........................$1,440,000 Less variable cost Cost of goods sold..................$480,000 Selling and...
-
the summarised data for 2016( first year operations ) for gorman products inc are as follows sales $4500000 Summarized data for 2016 (the first year of operations) for Gorman Products, Inc., are as...
-
Micah Bartlett Company purchased equipment on January 1, 2013, at a total invoice cost of $400,000. The equipment has an estimated salvage value of $10,000 and an estimated useful life of 5 years....
-
Briefly describe the Delphi technique.
-
Northern Defense manufactures radar systems. It has just completed the manufacture of its first newly designed system, RS-32. Manufacturing data for the RS-32 follow: Calculate the total variable...
-
Chapter 2 - Accounting for Materials Work in Process Bal. Inventory 3,600 | e. To finished goods 47,500 b. Material Requisitions 19,000 c. Direct Labor 17,000 d. Factory Overhead 12,000 Finished...
-
Katherine mailed Paul an offer with definite and certain terms and that was legal in all respects stating that it was good for 10 days. Two days later she sent Paul a letter by certified mail (time...
-
Cavo Corporation expects an EBIT of $23,750 every year forever. The company currently has no debt, and its cost of equity is 15 percent. The corporate tax rate is 35 percent. a. What is the current...
-
What role does ethics play in the management of a department, division or organization?
-
The current six-month interest rate at which funds can be loaned or borrowed is 6% Option. a Option. What is the theoretical (or equilibrium) futures price? b Option. What action would you take if...
-
In what ways was Peter an absolutist ruler? What did he hope to accomplish? Was he successful as a ruler? In what ways does he compare with another famous absolutist king -- King Louis XIV of France?
-
At BCD car wash, when a customer arrives, he or she first checks in with a receptionist and then leaves the car to one of several car washers. While the customer is waiting for the car to be washed,...
-
The next two questions refer to the below information: A) The trading desk at the Federal Reserve sold $700 million in T-Bills. If the current reserve requirement is 7%, how much will the money...
-
Briefly describe two benefits of estimating measurements. Short Answer: Learner must briefly describe a minimum of two benefits of estimating measurements to achieve satisfactory achievement for this...
-
Statement of financial position at the start of the week: ASSETS $ Property 350,000 Office Equipment 125,000 Inventories 80,000 Trade Receivables 70,000 Total assets 625,000 EQUITY AND LIABILITIES $...
-
Sportique Boutique reported the following financial data for 2012 and 2011. Instructions(a) Calculate the current ratio for Sportique Boutique for 2012 and 2011.(b) Suppose that at the end of 2012,...
-
Analyzing marketing variances A manufacturing company makes three different sizes of bass boats. These boats are sold to distributors who outfit them for fishing by adding outboard motors and...
-
Direct material variances The Baba Jim Company makes a variety of furniture items. One product, a sofa, has the following material standards: Pine lumber Oak lumber Springs 20 board feet @ $ .80 per...
-
Direct labor variances Wha Joon Company makes steel shelves, steel furniture, and several other steel products primarily for use in offices and industrial organizations. Standard labor costs for the...
![Mobile App Logo](https://dsd5zvtm8ll6.cloudfront.net/includes/images/mobile/finalLogo.png)
Study smarter with the SolutionInn App