Computation of contribution margin ratio bep and margin of

Assignment Help Financial Accounting

Reference no: EM13356709

Computation of contribution margin Ratio, BEP, and margin of Safety.

Aunt Pitty's Pies is a small bakery that sells its products to local restaurants and supermarkets. The Bakery's most recent income statement is as follows:

Sales	$78,000
Variable Costs	$24,960
Contribution Margin	$53,040
Fixed costs	$29,240
Net Income	$23,800

1. What is Aunt Pitty's Contribution Margin Ratio?

2. What is Aunt Pitty's breakeven level of sales revenues?

3. What is auto Pitty's Margin of Safety in the most recent year?

4. Assume that Aunt Pitty's is considering investing in new machinery that will decrease variable costs per unit by 10%. In order to achieve the savings, the bakery's fixed costs would increase by $6,360. What will happen to the breakeven level of sales revenues? You must give a specific numerical answer.

(NOTE: The Sales price will NOT change).

Reference no: EM13356709

Questions Cloud

Computing the indifference level of ebit between these two : computing the indifference level of ebit between these two alternatives.moon and chittenden are considering a new

Calculate the ebit-eps indifference pointmorton industries : calculate the ebit-eps indifference point.morton industries is considering opening a new subsidiary in boston to be

Calculate the ebit-eps indifference pointemco products has : calculate the ebit-eps indifference point.emco products has a present capital structure consisting only of common stock

Computation of break-even-point of airline companythe : computation of break-even-point of airline company.the smooth flight airline company is considering lowering fares in

Computation of contribution margin ratio bep and margin of : computation of contribution margin ratio bep and margin of safety.aunt pittys pies is a small bakery that sells its

Computation of break-even-point and contribution margin : computation of break-even-point and contribution margin ratio.breakeven point cost structure and target salesplainfield

Decision on closure of one of the units with the help of : decision on closure of one of the units with the help of decrease in net income.the most recent monthly income

Computation of contribution per unit for various : computation of contribution per unit for various models.person company makes two types of backpacks. data for the

Contribution income statement up to operating : contribution income statement up to operating incomestraightforward contribution income statement yoko ltd. had the

User Account

All Pages