For the coming year, the sales mix is expected to change so that 2 units of product B will be sold for every unit of product PInstructions:Determine the number of units for each product that must be sold in order to recover the total fixed cost in prior year.Determine the number of units for each product that must be sold in the coming year in order to break even.Determine the number of units for each product that must be sold in the coming year in order to realized a profit of P500,000 before tax. 4.18The Punch Bowl Corp. produces and sells two products, P and B. In prior year, PunchBowl has sold 3 units of product P for every unit of product B. Selected data on these productsshow the following:ВUnit selling priceUnit variable costTotal fixed cost of P600,000P10.00P157.00P 9For the coming year, the sales mix is expected to change so that 2 units of product B willbe sold for every unit of product P

In the case of multiple products being sold, we compute the break-even point for the company…

4.18 The Punch Bowl Corp. produces and sells two products, P and B. In prior year, Punch Bowl has sold 3 units of product P for every unit of product B. Selected data on these products show the following: P В Unit selling price Unit variable cost Total fixed cost of P600,000 P10.00 P15 7.00 P 9 For the coming year, the sales mix is expected to change so that 2 units of product B will pe sold for every unit of product P

4.18 The Punch Bowl Corp. produces and sells two products, P and B. In prior year, Punch Bowl has sold 3 units of product P for every unit of product B. Selected data on these products show the following: P В Unit selling price Unit variable cost Total fixed cost of P600,000 P10.00 P15 7.00 P 9 For the coming year, the sales mix is expected to change so that 2 units of product B will pe sold for every unit of product P

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter7: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 47E: Klamath Company produces a single product. The projected income statement for the coming year is as...

See similar textbooks

Similar questions

More-Power Company has projected sales of 75,000 regular sanders and 30,000 mini-sanders for next year. The projected income statement is as follows: Required: 1. Set up the given income statement on a spreadsheet (e.g., ExcelTM). Then, substitute the following sales mixes, and calculate operating income. Be sure to print the results for each sales mix (a through d). 2. Calculate the break-even units for each product for each of the preceding sales mixes.
Faldo Company produces a single product. The projected income statement for the coming year, based on sales of 200,000 units, is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. Suppose that 30,000 units are sold above the break-even point. What is the profit? 2. Compute the contribution margin ratio and the break-even point in dollars. Suppose that revenues are 200,000 greater than expected. What would the total profit be? 3. Compute the margin of safety in sales revenue. 4. Compute the operating leverage. Compute the new profit level if sales are 20 percent higher than expected. 5. How many units must be sold to earn a profit equal to 10 percent of sales? 6. Assume the income tax rate is 40 percent. How many units must be sold to earn an after-tax profit of 180,000?
Olivian Company wants to earn 420,000 in net (after-tax) income next year. Its product is priced at 275 per unit. Product costs include: Variable selling expense is 14 per unit; fixed selling and administrative expense totals 290,000. Olivian has a tax rate of 40 percent. Required: 1. Calculate the before-tax profit needed to achieve an after-tax target of 420,000. 2. Calculate the number of units that will yield operating income calculated in Requirement 1 above. (Round to the nearest unit.) 3. Prepare an income statement for Olivian Company for the coming year based on the number of units computed in Requirement 2. 4. What if Olivian had a 35 percent tax rate? Would the units sold to reach a 420,000 target net income be higher or lower than the units calculated in Requirement 3? Calculate the number of units needed at the new tax rate. (Round dollar amounts to the nearest dollar and unit amounts to the nearest unit.)
Klamath Company produces a single product. The projected income statement for the coming year is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. 2. Suppose 10,000 units are sold above break-even. What is the operating income? 3. Compute the contribution margin ratio. Use the contribution margin ratio to compute the break-even point in sales revenue. (Note: Round the contribution margin ratio to four decimal places, and round the sales revenue to the nearest dollar.) Suppose that revenues are 200,000 more than expected for the coming year. What would the total operating income be?
Q1. (Warren) Silver River Company sells Products S and T and has made the following estimates for the coming year. Product Unit Selling Price Unit Variable Cost S $3 $12 15 Sales Mix 30% 70% T 4 Fixed costs are estimated at $46,800. Instructions, Determine 1. the estimated number of units of each product necessary to be sold to reach the break-even point for the coming year by using mathematical approach 2. the estimated number of units of each product necessary to be sold to reach the break-even point for the coming year by using weighted average contribution margin approach
Tops Company sells Products D and E and has made the following estimates for the coming year: Product Unit Selling Price Unit Variable Cost Sales Mix D $30 $24 60% E 70 56 40 Fixed costs are estimated at $202,400. Determine (a) the estimated sales in units of the overall product necessary to reach the break-even point for the coming year, (b) the estimated number of units of each product necessary to be sold to reach the break-even point for the coming year, and (c) the estimated sales in units of the overall product necessary to realize an operating income of $119,600 for the coming year.
Tops Company sells Products D and E and has made the following estimates for the coming year: Product Unit Selling Price Unit Variable Cost Sale Mix D $30 $24 60% E 70 56 40 Fixed costs are estimated at $202,400. a. Determine the estimated sales in units of the overall product necessary to reach the break-even point for the coming year. Round intermediate calculations to the nearest cent.fill in the blank 1 units b. Determine the estimated number of units of each product necessary to be sold to reach the break-even point for the coming year. Product D fill in the blank 2 units Product E fill in the blank 3 units c. Determine the estimated sales in units of the overall product necessary to realize an operating income of $119,600 for the coming year.fill in the blank 4 units
Required information [The following information applies to the questions displayed below.] Henna Co. produces and sells two products, T and O. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company sold 46,000 units of each product. Sales and costs for each product follow. Product T Product 0 $ 800,400 640, 320 160,080 32,080 128,000 44,800 Sales $ 800,400 Variable costs 160,080 Contribution margin 640,320 512,320 Fixed costs 128,000 44,800 $ 83,200 Income before taxes Income taxes (35% rate) Net income $ 83, 200
ABC Company manufactures the product XE-17. The product is sold at a unit price of $70.Variable expenses are $13.50 per unit and fixed expenses are $220,000 per year.Required :a. What should be the product’s CM ratio? b. Calculate the BEP is sales dollars and in units for ABC Company. c. The manager of ABC company estimates that in the coming year, the company’s sales willincrease by $80,000 (from the current sales). How much should the net profit / loss increase/decrease if the fixed costs remain constant? d. The manager of ABC company predicts that by spending an additional $80,000 per year onadvertising and using higher quality raw material (which will in turn increase the raw materialcost per unit by $3), and increasing selling price per unit by 2% (to compensate for theincreased costs), unit sales will increase by two- thirds of the current sales units. Should thecompany go with the manager’s proposed plan? Explain your answer. (Assume that in thecurrent year, the company sold…
ABC Company manufactures the product XE-17. The product is sold at a unit price of $70.Variable expenses are $13.50 per unit and fixed expenses are $220,000 per year.Required :a. What should be the product’s CM ratio? b. Calculate the BEP is sales dollars and in units for ABC Company. c. The manager of ABC company estimates that in the coming year, the company’s sales willincrease by $80,000 (from the current sales). How much should the net profit / loss increase/decrease if the fixed costs remain constant? d. The manager of ABC company predicts that by spending an additional $80,000 per year onadvertising and using higher quality raw material (which will in turn increase the raw materialcost per unit by $3), and increasing selling price per unit by 2% (to compensate for theincreased costs), unit sales will increase by two- thirds of the current sales units. Should thecompany go with the manager’s proposed plan? Explain your answer. (Assume that in thecurrent year, the company sold…
Assume that Stillwater Designs produces two automotive subwoofers: S12L7 and S12L5. The S12L7 sells for $475, and the S12L5 sells for $300. Projected sales (number of speakers) for the coming five quarters are as follows: Line Item Description S12L7 S12L5 First quarter, 20Y1 800 1,300 Second quarter, 20Y1 2,200 1,400 Third quarter, 20Y1 5,600 5,300 Fourth quarter, 20Y1 4,600 3,900 First quarter, 20Y2 900 1,200 The vice president of sales believes that the projected sales are realistic and can be achieved by the company. Required: Question Content Area 1. Prepare a sales budget for each quarter of 20Y1 and for the year in total. Show sales by product and in total for each time period. Do not include a multiplication symbol as part of your answer. Stillwater Designs Sales Budget For the Year Ended December 31, 20Y1 Line Item Description 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. Year S12L7: Units Units Units Units Units Units Price $Price $Price $Price $Price $Price Sales $Sales $Sales $Sales…
Q1. (Warren) Silver River Company sells Products S and T and has made the following estimates for the coming year. Selling Price $12 Product Unit Unit Variable Cost Sales Mix $3 30% 15 4 70% Fixed costs are estimated at $46,800. Instructions, Determine 1. the estimated number of units of each product necessary to be sold to reach the break-even point for the coming year by using mathematical аpproach 2. the estimated number of units of each product necessary to be sold to reach the break-even point for the coming year by using weighted average contribution margin approach