Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Wildhorse Company produces a molded briefcase that is distributed to luggage stores. The following operating data for the current year has been accumulated for planning
Wildhorse Company produces a molded briefcase that is distributed to luggage stores. The following operating data for the current year has been accumulated for planning purposes. $34 10 Sales price Variable cost of goods sold Variable selling expenses Variable administrative expenses 9.0 3 Annual fixed expenses Overhead Selling expenses Administrative expenses $10,140,000 2,145,000 4,095,000 Wildhorse can produce 1,950,000 million cases a year. The projected net income for the coming year is expected to be $2,340,000 million. Wildhorse is subject to a Unresolved% income tax rate. During the planning sessions, Wildhorse's managers have been reviewing costs and expenses. They estimate that the company's variable cost of goods sold will increase 15% in the coming year and that fixed administrative expenses will increase by $195,000. All other costs and expenses are expected to remain the same. Calculate contribution margin per unit for the coming year. (Round contribution margin per unit to 2 decimal places, e.g. 0.38.) $ 10.50 Contribution margin per unit e Textbook and Media Attempts: 1 of 3 used (a2) Your Answer Correct Answer (Used) What amount of sales revenue will Wildhorse need to achieve in the coming year to earn the projected net income of $2,340,000 million? (Use the rounded contribution margin per unit calculated in the previous part to compute Sales Revenue. Round answer to 0 decimal places, e.g. 25,000.) $ Sales revenue 66,300,000 (b) What price would Wildhorse need to charge for the briefcase in the coming year to maintain the current year's contribution margin ratio? (Round ratio to 0 decimal places, e.g. 25%. Round per unit answer to 2 decimal places, e.g. 0.38.) $ Price e Textbook and Media Assistance Used
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started