Calculating-cost-volume-profit analysis

Assignment Help Managerial Accounting
Reference no: EM1347445

Scenario:

Sure Corporation has gathered the following information after its first year of sales. Net sales were $1,600,000 on 100,000 units; selling expenses $240,000 (40% variable and 60% fixed); direct materials $511,000; direct labor $285,000; administrative expenses $280,000 (20% variable and 80% fixed); manufacturing overhead $360,000 (70% variable and 30% fixed). Top management has asked you to do a CVP analysis so that it can make plans for the coming year. It has projected that till sales will raise by 10% next year.

Instructions:

A) Compute (1) the contribution margin for the current year and the projected year, and (2) the fixed costs for the current year (assume that fixed costs will remain the same in the projected year).

B) Compute the break-even point in units and sales dollars for the current year.

C) The company has a target net income of $310,000. What is the required sales in dollar's for the company to meet its target?

D) If the company meets its target net income number, by what percentage could its sales fall before it is operating at a loss? That is, what is its margin of safety ratio?

Reference no: EM1347445

Questions Cloud

Question regarding the cvp ananlysis : Suppose a fixed cost of $900, a variable cost of $4.50, and selling price of $5.50. Find out the break even point? How many units should be sold to make a profit of $500.? How many units should be sold to average $.0.25 profit per unit? .50 per un..
Find would the firms operating leverage : Would the firm's operating leverage increase or decrease if it made the change and would the new situation expose the firm to more or less business risk than the old one
What percentage of the molecules escape : A 0.410kg block is attached to a horizontal spring that is at its equilibrium length, and whose force constant is 22.0N/m . The block rests on a frictionless surface. A 6.00×10^2kg wad of putty is thrown horizontally at  block, hitting it with a s..
Explaining accuracy when using training set data : Explain what can you say about accuracy when using training set data and when using separate percentage to train?
Calculating-cost-volume-profit analysis : Sure Corporation has gathered the following information after its first year of sales. Net sales were $1,600,000 on 100,000 units; selling expenses $240,000 (40% variable and 60% fixed); direct materials $511,000; direct labor $285,000; administra..
Difference between operating and financial leverages : Show the difference between operating and financial leverage. Can there be too much financial leverage in a firm?
Construct a price weighted index : Three (3) stocks have share values of $12, $75, and $30 with total market rates of $400 million, $350 million & $150 million respectively.
Expalin performance and motivation theory : Expalin Performance and Motivation Theory - How does a leader leverage them as he or she focuses on improving business results
Show the discussion of theories of change management : Show the discussion of theories of change management - Change management is essentially a communication strategy that reduces anxiety and concerns in those being affected in order to help them accept change.

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Manage budgets and financial plans

Explain the budgeting process and its importance to a business, identifying the components of different budgets, forecast estimates for inclusion in the budgets.

  Prepare a retained earnings statement

Prepare a retained earnings statement for the year and Prepare a stockholders' equity section of given case.

  Prepare a master budget for the three-month period

Prepare a master budget for the three-month period.

  Construct the companys direct labor budget

Construct the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.

  Evaluate the predetermined overhead rate

Evaluate the Predetermined Overhead Rate

  Determine the company''s bid

Determine the company's bid if activity-based costing is used and the bid is based upon full manufacturing cost plus 30 percent.

  Compute the pool rates for the different activities

Complete the schedule to compute the pool rates for the different activities.

  Prepare Company financial statements

Prepare Company financial statements

  Prepare an analysis of terracycles

This individual assignment is based on the TerraCycle Inc.

  Discuss the ethical issues

Discuss the ethical issues

  Political resources in emerging markets

Calculate the GDP in Income Approach  and Expenditure Approach

  Management accounting - ehsan electronics company

A new plant accountant suggested that the company may be able to assign support costs to products more accurately by using an activity based costing system that relies on a separate rate for each manufacturing activity that causes support costs.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd