Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Van Nostrand Company makes neck ties that sell for $40 each. For the coming year, management expects fixed costs to be $480,000. Variable costs

image text in transcribed

Van Nostrand Company makes neck ties that sell for $40 each. For the coming year, management expects fixed costs to be $480,000. Variable costs are $30 per unit. Instructions (show all work) (a) Compute break-even sales in dollars using the mathematical equation. (b) Compute break-even in units using the contribution margin. (c) (d) Compute break-even sales in dollars using the contribution margin ratio. Compute margin of safety ratio assuming actual sales are $2,400,000. (e) Compute the sales in dollars required to earn net income of $120,000 using contribution margin ratio.

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

Managerial Accounting Tools for business decision making

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

6th Edition

978-0470477144, 1118096894, 9781118214657, 470477148, 111821465X, 978-1118096895

More Books

Students also viewed these Accounting questions

Question

8. In which techniques time is adjusted with the value of money?

Answered: 1 week ago

Question

7. Give a brief idea regarding financial environment of a business.

Answered: 1 week ago