Shaw Landscapes (SL) develops and sells plans for various types of gardens and outdoor spaces. Customers...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Shaw Landscapes (SL) develops and sells plans for various types of gardens and outdoor spaces. Customers use the plans to install various landscape features such as gardens, ponds, walls, etc. The operating budget for 2023 called for 3,000 units to be produced and sold. Budgeted Income per unit - FY2023 Revenue $2,400 Direct Labor (13 hrs @ $50 per hr) $650 Variable overhead (production) $225 Fixed overhead (production) $300 Gross Margin $1,225 Marketing and administrative costs (all fixed) $750 Operating Income per unit before taxes Tax Expense @ 21% Operating Income per unit after taxes $475 $99.75 $375.25 What is the break even number of plans based on current costs? Shaw Landscapes (SL) develops and sells plans for various types of gardens and outdoor spaces. Customers use the plans to install various landscape features such as gardens, ponds, walls, etc. The operating budget for 2023 called for 3,000 units to be produced and sold. Budgeted Income per unit - FY2023 Revenue $2,400 Direct Labor (13 hrs @ $50 per hr) $650 Variable overhead (production) $225 Fixed overhead (production) $300 Gross Margin $1,225 Marketing and administrative costs (all fixed) $750 Operating Income per unit before taxes $475 Tax Expense @ 21% Operating Income per unit after taxes $99.75 $375.25 In preparing the budget for FY2024, SL is considering a price increase of 5% per unit. No changes in either variable costs per unit or total fixed costs are anticipated from the FY2023 budget presented above. Management does believe that the price increase would decrease the total number of plans sold to 2,800 units. Calculate the net change in total after tax operating profit under the two scenarios. Present your answer as the budgeted after tax operating profit in FY2024 less the budgeted after tax operating profit in FY2023. Shaw Landscapes (SL) develops and sells plans for various types of gardens and outdoor spaces. Customers use the plans to install various landscape features such as gardens, ponds, walls, etc. The operating budget for 2023 called for 3,000 units to be produced and sold. Budgeted Income per unit - FY2023 Revenue $2,400 Direct Labor (13 hrs @ $50 per hr) $650 Variable overhead (production) $225 Fixed overhead (production) $300 Gross Margin $1,225 Marketing and administrative costs (all fixed) $750 Operating Income per unit before taxes Tax Expense @ 21% Operating Income per unit after taxes $475 $99.75 $375.25 What is the break even number of plans based on current costs? Shaw Landscapes (SL) develops and sells plans for various types of gardens and outdoor spaces. Customers use the plans to install various landscape features such as gardens, ponds, walls, etc. The operating budget for 2023 called for 3,000 units to be produced and sold. Budgeted Income per unit - FY2023 Revenue $2,400 Direct Labor (13 hrs @ $50 per hr) $650 Variable overhead (production) $225 Fixed overhead (production) $300 Gross Margin $1,225 Marketing and administrative costs (all fixed) $750 Operating Income per unit before taxes $475 Tax Expense @ 21% Operating Income per unit after taxes $99.75 $375.25 In preparing the budget for FY2024, SL is considering a price increase of 5% per unit. No changes in either variable costs per unit or total fixed costs are anticipated from the FY2023 budget presented above. Management does believe that the price increase would decrease the total number of plans sold to 2,800 units. Calculate the net change in total after tax operating profit under the two scenarios. Present your answer as the budgeted after tax operating profit in FY2024 less the budgeted after tax operating profit in FY2023.
Expert Answer:
Related Book For
Posted Date:
Students also viewed these accounting questions
-
5 Melbourne Corporation has traditionally made a subcomponent of its major product. Annual production of 30,000 subcomponents results in the following costs: Direct materials Direct labor Variable...
-
Abner Company purchases a patent for $156,000 on January 2, 2017. Its estimated useful life is 6 years. (a) Prepare the journal entry to record amortization expense for the first year. (b) Show how...
-
Our cat, Fred, has convinced me that I should set up an account that will assure him of his Meow Mix for the next 4 years. I will deposit an amount P today that will permit Fred to make...
-
Portfolios are constructed to reduce risk for a given level of economic return. In this context, why would a company be interested in constructing an ecoefficiency portfolio?
-
Amy and Lester are partners in operating a store. Without consulting Amy, Lester enters into a contract to purchase merchandise for the store. Amy contends that she did not authorize the order and...
-
Each month Naomi has a minimum credit card payment of $325, a car payment of $452.36, a car insurance payment of $109, and monthly gross income of $6,125. If she is applying for a loan for which the...
-
James Garage Ltd is a high end tire and rim sales company with installation and repair facilities. The following information can be obtained from the company's financial statements. James Garage Ltd...
-
Read the chapters given below and identify the subject matter of the controversy, whether the common law or the UCC would cover the contractual issues, and explain the reasons for your conclusions....
-
Describe the key cultural differences between the US and China. Include specific differences in leadership communication and the adjustments you would need to make if you were planning a business...
-
The thickness of a flint glass plate is 12 cm thick. The index of refraction is 1.45. A ray of incident light strikes the upper surface at angle = 45 degrees, with respect to the normal direction....
-
How many local minima and maxima the following function has? 2 function f(x) = x - 4x
-
How is content marketing related to the Digital Display Advertising what is the projection of the effect of successful content marketing strategy?
-
(4) Sky High Company is considering the purchase of an investment of $250,000. Data related to the investment are as follows: $7,000 Cash flows (at the end of the next 4 years) $125,000 Salvage value...
-
A projectile is fired at an angle a with the horizontal, with initial velocity v,. If it experiences the resistive force F, = -kv, find a) the expression for distance covered x (t) b) the expression...
-
True & False The basis of an asset must be reduced by the depreciation allowable, 2. Adjusted gross income (AGI) is the basis for a number of phase-outs of deductions. 3. A change to adjusted gross...
-
Littlefield Partners produce a part sold to agricultural equipment suppliers. For the last year (Year 1), the price, costs, and volume of the part were as follows: Managers at Littlefield believe...
-
Lasky Manufacturing has two divisions: Carolinas and Northeast. Lasky has a cost of capital of 7.5 percent. Selected financial information (in thousands of dollars) for the first year of business...
-
Many firms in the service industry have empowered their customer-facing employees to handle service complaints on the spot rather than having the customer contact a corporate customer service center....
-
Let \(A\) and \(B\) be disjoint events with \(P(A)=0.3\) and \(P(B)=0.45\). Determine the probabilities \(P(A \cup B), P(\overline{A \cup B}), P(\bar{A} \cup \bar{B})\), and \(P(\bar{A} \cap B)\).
-
Let \(P(A \cap \bar{B})=0.3\) and \(P(\bar{B})=0.6\). Determine \(P(A \cup B)\).
-
Check whether for 3 arbitrary random events \(A, B\), and \(C\) the following constellations of probabilities can be true: (1) \(P(A)=0.6, P(A \cap B)=0.2\), and \(P(A \cap \bar{B})=0.5\), (2)...
Study smarter with the SolutionInn App