SalesCost of goods soldGross profitExpenses:$186,000,000(102,000,000)$84,000,000Selling expenses$16,000,000Administrative expenses5,200,000Total expenses(21,200,000)Operating income$62,800,000The division of costs between variable and fixed is as follows:Cost of goods soldSelling expensesAdministrativeexpensesVariableFixed70%30%75%25%50%50%Management is considering a plant expansion program for the following year that will permit anincrease of $11,160,000 in yearly sales. The expansion will increase fixed costs by $3,000,000 butwill not affect the relationship between sales and variable costs.Required:1. Determine the total variable costs and the total fixed costs for the current year.Total variable costsTotal fixed costs86,000,000 ✓37,700,000 X2. Determine (a) the unit variable cost and (b) the unit contribution margin for the current year.Unit variable costUnit contribution margin86 V✓1003. Compute the break-even sales (units) for the current year.377,000 X units4. Compute the break-even sales (units) under the proposed program for the following year.417,000 X units5. Determine the amount of sales (units) that would be necessary under the proposed programto realize the $62,800,000 of operating income that was earned in the current year.1,040,000 x units6. Determine the maximum operating income possible with the expanded plant.

CVP analysis, which stands for Cost-Volume-Profit analysis, is a managerial accounting technique…

Answered: Sales Cost of goods sold $186,000,000…

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter12: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 12.16E: Product cost concept of product pricing Based on the data presented in Exercise 12-15, assume that...

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Similar questions

Cost of goods sold Pine Creek Company completed 200,000 units during the year at a cost of 3,000,000. The beginning finished goods inventory was 25,000 units at 310,000. Determine the cost of goods sold for 210,000 units, assuming a FIFO cost flow.
Cost of Goods Manufactured, Income Statement W. W. Phillips Company produced 4,000 leather recliners during the year. These recliners sell for 400 each. Phillips had 500 recliners in finished goods inventory at the beginning of the year. At the end of the year, there were 700 recliners in finished goods inventory. Phillips accounting records provide the following information: Required: 1. Prepare a statement of cost of goods manufactured. 2. Compute the average cost of producing one unit of product in the year. 3. Prepare an income statement for external users.
What are the total costs to account for if a companys beginning inventory had $231,432 in materials, $186,450 in conversion costs, and added direct material costs ($4,231,392), direct labor ($2,313,392), and manufacturing overhead ($1,156,696)?
Cost of goods sold and related items The following data were extracted from the accounting records of Harkins Company for the year ended April 30, 20Y8: Estimated returns of current year sales 11,600 Inventory, May 1, 20Y7 380,000 Inventory, April 30, 20Y8 415,000 Purchases 3,800,000 Purchases returns and allowances 150,000 Purchases discounts 80,000 Sales 5,850,000 Freight in 16,600 a. Prepare the Cost of goods sold section of the income statement for the year ended April 30, 20Y8, using the periodic inventory system. b. Determine the gross profit to be reported on the income statement for the year ended April 30, 20Y8. c. Would gross profit be different if the perpetual inventory system was used instead of the periodic inventory system?
Ellerson Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 278,000, direct labor cost was 189,000, and overhead cost was 523,000. During the year, 100,000 units were completed. Refer to Exercise 2.21. Last calendar year, Ellerson recognized revenue of 1,312,000 and had selling and administrative expenses of 204,600. Required: 1. What is the cost of goods sold for last year? 2. Prepare an income statement for Ellerson for last year.
Garrett Company provided the following information: Common fixed cost totaled 46,000. Garrett allocates common fixed cost to Product 1 and Product 2 on the basis of sales. If Product 2 is dropped, which of the following is true? a. Sales will increase by 300,000. b. Overall operating income will increase by 2,600. c. Overall operating income will decrease by 25,000. d. Overall operating income will not change. e. Common fixed cost will decrease by 27,600.
The following data were adapted from a recent income statement of Caterpillar Inc. (CAT) for the year ended December 31: Assume that 8,500 million of cost of goods sold and 4,000 million of selling, administrative, and other expenses were fixed costs. Inventories at the beginning and end of the year were as follows: Also, assume that 30% of the beginning and ending inventories were fixed costs. a. Prepare an income statement according to the variable costing concept for Caterpillar Inc. Round numbers to nearest million. b. Explain the difference between the amount of operating income reported under the absorption costing and variable costing concepts. Round numbers to nearest million.
Product cost concept of product pricing Based on the data presented in Exercise 12-15, assume that Willis Products Inc. uses the product cost concept of applying the cost-plus approach to product pricing. a.Determine the total manufacturing costs and the cost amount per unit for the production and sale of 200,000 units. b.Determine the product cost markup percentage per unit. Round to two decimal place. c.Determine the selling price per unit. Round to the nearest dollar.
Quality Cost Report Loring Company had total sales of 2,400,000 for fiscal 20X1. The costs of quality-related activities are given below. Required: 1. Prepare a quality cost report, classifying costs by category and expressing each category as a percentage of sales. What message does the cost report provide? 2. Prepare a bar graph and pie chart that illustrate each categorys contribution to total quality costs. Comment on the significance of the distribution.
The following data relates to Campus Goods Inc: Required: Based on the above data determine the following: 8A. Cost of Goods Sold in $ is ___________. 250,000 100,000 150,000 220,000 unanswered 8B. Gross Profit in $ and % is ___________ and ___________ respectively. 250,000 and 20% 180,0000 and 40% 180,000 and 45% 220,000 and 45% unanswered 8C. Operating expenses is ___________. 100,000 150,000 200,000 120,000 unanswered 8D. Operating profit in $ is ___________. 55,000 65,000 80,000 70,000
From these results of operations, determine the cost of goods manufactured of XY Co.Finished goods -beg P72,000 Sales P465,000Finished goods - end P66,000 Gross margin P88,000 a. P371,000b. P377,000c. P383,000d. P459,000
For each of the following, determine the missing amounts. SalesRevenue Cost ofGoods Sold GrossProfit OperatingExpenses NetIncome $100,000 $ $ $30,000 $12,000 $ $135,000 $125,000 $ $80,000

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