Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The Contribution income statement for Deines Corporation presented below shows the operating results for the fiscal year just ended. Deines had sales of 1,800 tons

The Contribution income statement for Deines Corporation presented below shows the operating results for the fiscal year just ended. Deines had sales of 1,800 tons of product during that year. The manufacturing capacity of Deines facilities is 3,000 tons of product. Revenues 900,000$

Variable cost:

Manufacturing 315,000$

Nonmanufacturing 180,000 495,000

Contribution margin 405,000

Fixed cost:

Manufacturing 90,000

Nonmanufacturing 157,500 247,500

Operating income 157,500

  1. If the sales volume is estimated to be 2,100 tons for next year, and if the selling price and cost-behavior patterns remain the same next year, how much net income does Deines expect to earn next year?

Assume Deines estimates the selling price per ton will decline 10% next year, variable cost will increase by $40 per ton, and total fixed costs will not change. Compute how many tons must be sold next year to earn net income of $94,500.

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

Consolidated Financial Reporting

Authors: Paul Taylor

1st Edition

1853962503, 9781853962509

More Books

Students also viewed these Accounting questions