Question
The following CVP income statements are available for Blanc Company and Noir Company. Blanc Company Noir Company Sales$540,000$540,000Variable costs324,000270,000Contribution margin216,000270,000Fixed costs189,000243,000Net income$27,000$27,000 Part 1 Calculate
The following CVP income statements are available for Blanc Company and Noir Company.
Blanc Company
Noir Company
Sales$540,000$540,000Variable costs324,000270,000Contribution margin216,000270,000Fixed costs189,000243,000Net income$27,000$27,000
Part 1
Calculate Contribution margin ratio. (Round answers to 2 decimal places, e.g. 0.32.)
Contribution Margin Ratio
Blanc CompanyEnter a dollar amount
Noir CompanyEnter a dollar amount
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Part 2
Compute the break-even point in dollars for each company. (Round answers to 0 decimal places, e.g. 5,125.)
Break-even Point
Blanc Company$Enter a dollar amount
Noir Company$Enter a dollar amount
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Part 3
Compute margin of safety ratio for each company. (Round answers to 3 decimal places, e.g. 0.321.)
Margin of Safety Ratio
Blanc CompanyEnter a number
Noir CompanyEnter a number
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Part 4
Compute the degree of operating leverage for each company. (Round answers to 2 decimal places, e.g. 1.56.)
Degree of Operating Leverage
Blanc CompanyEnter a number
Noir CompanyEnter a number
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Part 5
Assuming that sales revenue increases by 20%, prepare a CVP income statement for each company. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Blanc Company
Noir Company
Sales$Enter a dollar amount
$Enter a dollar amount
Variable costsEnter a dollar amountEnter a dollar amountContribution marginEnter a total of the two previous amounts
Enter a total of the two previous amounts
Fixed costsEnter a dollar amountEnter a dollar amountNet income / (Loss)$Enter a total amount for this statement
$Enter a total amount for this statement
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Part 6
Assuming that sales revenue decreases by 20%, prepare a CVP income statement for each company. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Blanc Company
Noir Company
Sales$Enter a dollar amount
$Enter a dollar amount
Variable costsEnter a dollar amountEnter a dollar amountContribution marginEnter a total of the two previous amounts
Enter a total of the two previous amounts
Fixed costsEnter a dollar amountEnter a dollar amountNet income / (Loss)$Enter a total amount for this statement
$Enter a total amount for this statement
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