Company has achieved steady growth over the past few years while Biscuit prices have been on the increase. The Company is planning its budget for the next financial year. Presented below are the data used to project the current year’s aftertax income of £110,400. Average Sales Price per Box 4.00 Average variable costs per Box Cost of Biscuits 2.00 Profit on sale 0.40 Total 2.40 Annual fix
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Edward Food Processing Company is a wholesale distributor of biscuits in Holborn.
The Company has achieved steady growth over the past few years while Biscuit
prices have been on the increase. The Company is planning its budget for the next
financial year. Presented below are the data used to project the current year’s aftertax income of £110,400.
Average Sales Price per Box 4.00
Average variable costs per Box
Cost of Biscuits 2.00
Profit on sale 0.40
Total 2.40
Annual fixed cost
Selling 160,000
Administrative 280,000
Total 440.000
Expected annual sales volume
(390,000 boxes) £1,560,000
Tax rate 20%
Biscuit manufacturers have announced that they will increase prices of their
products by an average of 15% in the coming year due to increase in material and
labour costs. Edward Food Processing expects same rates or levels as the current
year.
(a) Calculate Break-even point in boxes of biscuits for the current year.
(b) Calculate the Sales price per box that the company must charge to cover the
15% increase in the costs of biscuits and still maintain the current contribution
margin ratio.
(c) Determine the Volume of sales the company must achieve in the coming
year to maintain the same net income as projected for the current year
if the sales price of biscuits remains at £4 per box and the cost of
biscuits increases by 15%
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- Edward Food Processing Company is a wholesale distributor of biscuits in Holborn. The Company has achieved steady growth over the past few years while Biscuit prices have been on the increase. The Company is planning its budget for the next financial year. Presented below are the data used to project the current year’s after- tax income of £110,400.£Average Sales Price per Box 4.00Average variable costs per BoxCost of Biscuits 2.00 Profit on sale 0.40 Total 2.40 Annual fixed costSelling Administrative TotalExpected annual sales volume (390,000 boxes)160,000 280,000 440.000 £1,560,000 Tax rate 20%Biscuit manufacturers have announced that they will increase prices of their products by an average of 15% in the coming year due to increase in material and labour costs. Edward Food Processing expects same rates or levels as the current year. a) Calculate Break-even point in boxes of biscuits for the current year.(b) Calculate the Sales price per box that the company must charge to cover the…Edward Food Processing Company is a wholesale distributor of biscuits in Holborn.The Company has achieved steady growth over the past few years while Biscuitprices have been on the increase. The Company is planning its budget for the nextfinancial year. Presented below are the data used to project the current year’s aftertax income of £110,400. £Average Sales Price per Box 4.00Average variable costs per Box Cost of Biscuits 2.00 Profit on sale 0.40 Total 2.40Annual fixed cost Selling 160,000 Administrative 280,000 Total 440.000Expected annual sales volume (390,000 boxes) £1,560,000Tax rate 20%Biscuit manufacturers have announced that they will increase prices of theirproducts by an average of 15% in the coming year due to increase in material andlabour costs. Edward Food Processing expects same rates or levels as the currentyear. Required:(a) Calculate the Sales price per box that the company must charge to cover the15% increase in the costs of biscuits and still maintain the current…Edward Food Processing Company is a wholesale distributor of biscuits in Holborn.The Company has achieved steady growth over the past few years while Biscuitprices have been on the increase. The Company is planning its budget for the nextfinancial year. Presented below are the data used to project the current year’s aftertax income of £110,400. £Average Sales Price per Box 4.00Average variable costs per Box Cost of Biscuits 2.00 Profit on sale 0.40 Total 2.40Annual fixed cost Selling 160,000 Administrative 280,000 Total 440.000Expected annual sales volume (390,000 boxes) £1,560,000Tax rate 20%Biscuit manufacturers have announced that they will increase prices of theirproducts by an average of 15% in the coming year due to increase in material andlabour costs. Edward Food Processing expects same rates or levels as the currentyear Required: (b) Calculate the Sales price per box that the company must charge to cover the15% increase in the costs of biscuits and still maintain the…
- Edward Food Processing Company is a wholesale distributor of biscuits in Holborn.The Company has achieved steady growth over the past few years while Biscuitprices have been on the increase. The Company is planning its budget for the nextfinancial year. Presented below are the data used to project the current year’s aftertax income of £110,400. £Average Sales Price per Box 4.00Average variable costs per Box Cost of Biscuits 2.00 Profit on sale 0.40 Total 2.40Annual fixed cost Selling 160,000 Administrative 280,000 Total 440.000Expected annual sales volume (390,000 boxes) £1,560,000Tax rate 20%Biscuit manufacturers have announced that they will increase prices of theirproducts by an average of 15% in the coming year due to increase in material andlabour costs. Edward Food Processing expects same rates or levels as the currentyear. Required:(a) Calculate Break-even point in boxes of biscuits for the current year.Edward Food Processing Company is a wholesale distributor of biscuits in Holborn.The Company has achieved steady growth over the past few years while Biscuitprices have been on the increase. The Company is planning its budget for the nextfinancial year. Presented below are the data used to project the current year’s aftertax income of £110,400. £Average Sales Price per Box 4.00Average variable costs per Box Cost of Biscuits 2.00 Profit on sale 0.40 Total 2.40Annual fixed cost Selling 160,000 Administrative 280,000 Total 440.000Expected annual sales volume (390,000 boxes) £1,560,000Tax rate 20%Biscuit manufacturers have announced that they will increase prices of theirproducts by an average of 15% in the coming year due to increase in material andlabour costs. Edward Food Processing expects same rates or levels as the currentyear.Required:(a) Calculate Break-even point in boxes of biscuits for the current year.(b) Calculate the Sales price per box that the company must charge to cover…Edward Food Processing Company is a wholesale distributor of biscuits in Holborn.The Company has achieved steady growth over the past few years while Biscuitprices have been on the increase. The Company is planning its budget for the nextfinancial year. Presented below are the data used to project the current year’s aftertax income of £110,400. £Average Sales Price per Box 4.00Average variable costs per Box Cost of Biscuits 2.00 Profit on sale 0.40 Total 2.40Annual fixed cost Selling 160,000 Administrative 280,000 Total 440.000Expected annual sales volume (390,000 boxes) £1,560,000Tax rate 20%Biscuit manufacturers have announced that they will increase prices of theirproducts by an average of 15% in the coming year due to increase in material andlabour costs. Edward Food Processing expects same rates or levels as the currentyear. Required:b) Determine the Volume of sales the company must achieve in the comingyear to maintain the same net income as projected for the current yearif the…
- Edward Food Processing Company is a wholesale distributor of biscuits in Holborn. The Company has achieved steady growth over the past few years while Biscuit prices have been on the increase. The Company is planning its budget for the next financial year. Presented below are the data used to project the current year’s after- tax income of $110,400. £ Average Sales Price per Box 4.00 Average variable costs per Box Cost of Biscuits 2.00Profit on sale 0.40 Total 2.40 Annual fixed cost Selling 160,000 Administrative 280,000 Total 440.000 Expected annual sales volume (390,000 boxes) $1,560,000 Tax rate…Edward Food Processing Company is a wholesale distributor of biscuits in Holborn. The Company has achieved steady growth over the past few years while Biscuit prices have been on the increase. The Company is planning its budget for the next financial year. Presented below are the data used to project the current year’s after- tax income of £110,400. £ Average sales price per box 4.00 Average variable cost per box Cost of biscuits 2.00 Profit on sales 0.40 Total 2.40 Annual fixed cost Selling 160,000 Administrative 280,000 Total 440,000 Expected annual sales volume (390,000) 1,560,000 Tax rate 20% Biscuit manufacturers have announced that they will increase prices of their products by an average of 15% in the coming year due to increase in material and labour costs. Edward Food Processing expects same rates or levels as the current year. a) Calculate Break-even point in boxes of biscuits for the…Edward Food Processing Company is a wholesale distributor of biscuits in Holborn. The Company has achieved steady growth over the past few years while Biscuit prices have been on the increase. The Company is planning its budget for the next financial year. Presented below are the data used to project the current year’s after- tax income of $110,400. £ Average Sales Price per Box 4.00 Average variable costs per BoxCost of Biscuits 2.00 Profit on sale 0.40Total 2.40 Annual fixed cost Selling 160,000Administrative 280,000Total…
- Keleher Industries manufactures pet doors and sells them directly to the consumer via their web site. The marketing manager believes that if the company invests in new software, they will increase their sales by 10%. The new software will increase fixed costs by $400 per month. Prepare a forecasted contribution margin income statement for Keleher Industries reflecting the new software cost and associated increase in sales. The previous annual statement is as follows:Hammond Company runs a driving range and golf shop. The budgeted income statement for the coming year is as follows. Required: 1. What is Hammonds variable cost ratio? Its contribution margin ratio? 2. Suppose Hammonds actual revenues are 200,000 greater than budgeted. By how much will before-tax profits increase? Give the answer without preparing a new income statement. 3. How much sales revenue must Hammond earn in order to break even? What is the expected margin of safety? (Round your answers to the nearest dollar.) 4. How much sales revenue must Hammond generate to earn a before-tax profit of 130,000? An after-tax profit of 90,000? (Round your answers to the nearest dollar.) Prepare a contribution margin income statement to verify the accuracy of your last answer.Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $20 per unit. Variable expenses are $8 per unit, and fixed expenses total $180,000 per year. Answer the following independent questions: What is the product's CM ratio? Use the CM ratio to determine the break-even point in dollar sales. Due to an increase in demand, the company estimates that sales will increase by $75,000 during the next year. By how much should net operating income increase (or net loss decrease) assuming that fixed expenses do not change? Refer to the original data. Assume that the company sold 18,000 units last year. The sales manager is convinced that a 10% reduction in the selling price, combined with a $30,000 increase in advertising, would increase annual unit sales by one-third. Prepare two contribution format income statements, one showing the results of last year's operations and one showing the results of operations if these changes are made. Would you recommend that the…