Question
The budgets of four companies yield the following information: LOADING... (Click the icon to view the budget information for the four companies.) Requirements 1. Fill
The budgets of four companies yield the following information:
LOADING...
(Click the icon to view the budget information for the four companies.)
Requirements
| 1. | Fill in the blanks for each company. |
| 2. | Compute breakeven, in sales dollars, for each company. Which company has the lowest breakeven point in sales dollars? What causes the low breakeven point? |
Requirement 1. Fill in the blanks for each company. (Round the contribution margin per unit and ratio calculations to two decimal places.)
|
|
| Q |
| Target sales. . . . . . . . . . . . . . . . . . | $687,500 | |
| Variable expenses. . . . . . . . . . . . . | 192,500 | |
| Fixed expenses. . . . . . . . . . . . . . . |
| |
| Operating income (loss). . . . . . . . | $90,000 | |
| Units sold. . . . . . . . . . . . . . . . . . . . |
| |
| Contribution margin per unit. . . . | $6.60 | |
|
| Contribution margin ratio. . . . . . . |
|
| R |
| $331,250 |
|
|
| 156,000 |
|
|
| 125,000 |
|
|
| 0.80 |
| S |
| $190,000 |
|
|
| 90,000 |
|
|
| 12,000 |
| $9.50 |
|
|
| T |
|
|
| 360,000 |
|
|
| $152,000 |
| 20,000 |
| $32.00 |
|
|
Requirement 2. Compute breakeven, in sales dollars, for each company. Which company has the lowest breakeven point in sales dollars? What causes the low breakeven point?
Begin by determining the formula, then compute the break even sales for each company one at a time. (Complete all answer boxes. For amounts with a $0 balance, make sure to enter "0" in the appropriate cell.)
|
| ( |
| + |
| ) / |
| = | Breakeven sales |
| Q | ( |
| + |
| ) / |
| = |
|
| R | ( |
| + |
| ) / |
| = |
|
| S | ( |
| + |
| ) / |
| = |
|
| T | ( |
| + |
| ) / |
| = |
|
Which company has the lowest breakeven point in sales dollars? What causes the low breakeven point?
Q Company
R Company
S Company
T Company
has the lowest breakeven point, primarily due to
its high fixed costs
its low fixed costs
its high sales price
.
| Company | |||||
| | | Q | R | S | T |
| Target sales. . . . . . . . . . . . . . . . | $687,500 | $331,250 | $190,000 | $ | |
| Variable expenses. . . . . . . . . . | 192,500 | | | 360,000 | |
| Fixed expenses. . . . . . . . . . . . . | | 156,000 | 90,000 | | |
| Operating income (loss). . . . . . | $90,000 | $ | $ | $152,000 | |
| Units sold. . . . . . . . . . . . . . . . . | | 125,000 | 12,000 | 20,000 | |
| Contribution margin per unit. . | $6.60 | $ | $9.50 | $32.00 | |
| | Contribution margin ratio. . . . . | | 0.80 | | |
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