Exercise 4-12 target profit and break-even analysis; margin of safety


Exercise 4-12 Target Emolument and Break-Even Analysis; Lip of Safety; CM Fitness [LO1, LO3, LO5, LO6, LO7]
Exercise 4-12 Target Emolument and Break-Even Analysis; Lip of Safety; CM Fitness [LO1, LO3, LO5, LO6, LO7]
 
Menlo Society distributes a separate issue. The society's sales and expenses for conclusive month follow:

   Total Per Unit
  Sales $1,092,000   $70
  Varitelling expenses 764,400   49
  Assistance lip 327,600   $21
  Unroving expenses 264,600   
  Net unhindered allowance $63,000   
________________________________________
 
Requirement 1:
What is the monthly break-even purpose in items sold and in sales dollars? (Omit the "$" indication in your acceptance.)

Requirement 2:
Without repairinging to computations, what is the entirety assistance lip at the break-even purpose? (Omit the "$" indication in your acceptance.)
Requirement 3:
How manifold items would entertain to be sold each month to deserve a target emolument of $96,600? Use the formula regularity.

  Units sold  items 


Requirement 4:
Refer to the pristine postulates. Compute the society's lip of insurance in twain dollar and percentage stipulations. (Round your percentage treasure to 2 decimal places. Omit the "$" and "%" indications in your acceptance.)

    Dollars Percentage  
  Lip of insurance $  
 % 

________________________________________

 
Requirement 5:
What is the society's CM fitness? If sales acception by $91,000 and there is no modify in unroving expenses, by how greatly would you await monthly net unhindered allowance to acception?(Omit the "$" and "%" indications in your acceptance.)

  
  CM fitness  % 

  Increased net unhindered allowance $     

 

Problem 4-31 Changes in Unroving and Varitelling Costs; Target Emolument and Break-Even Analysis [LO4, LO5, LO6]
 
Neptune Society consequences toys and other items for use in seaboard and repairing areas. A mean, inflattelling toy has conclude onto the dispense that the society is uneasy to consequence and hawk. The new toy succeed hawk for $2.9 per item. Enough compatability exists in the society's fix to consequence 30,900 items of the toy each month. Varitelling absorbs to construction and hawk one item would be $1.84, and unroving absorbs associated after a while the toy would entirety $48,631 per month.
 
     The society's Marketing Department predicts that claim for the new toy succeed abound the 30,900 items that the society is telling to consequence. Subjoined manufacturing quantity can be rented from another society at a unroving absorb of $2,432 per month. Varitelling absorbs in the rented quickness would entirety $2.03 per item, due to partially near efficient operations than in the main fix.

Requirement 1:

(a)   Calculate the assistance lip per item on everything aggravate 30,900 items. (Round your repartee to 2 decimal places. Omit the "$" indication in your acceptance.)

  Assistance lip $  

 
(b)   Compute the entirety unroving absorbs to be familiar if past than 30,900 items are consequenced. (Omit the "$" indication in your acceptance)

  Entirety unroving absorbs to be familiar by cherishing sales $  

 
(c)   Compute the monthly break-even purpose for the new toy in items and in entirety sales dollars. (Round your repartees to the direct unimpaired sum. Omit the "$" indication in your acceptance.)

  
  Monthly break-even purpose in item sales  items 

  Monthly break-even purpose in dollar sales $          

________________________________________
 
Requirement 2:
How manifold items must be sold each month to compel a monthly emolument of $10,962?

  Units to be sold  items 

 
Requirement 3:
If the sales superintendent receives a benefit of 20 cents for each item sold in advance of the break-even purpose, how manifold items must be sold each month to deserve a revert of 21% on the monthly boarding in unroving absorbs? (Round your repartee to the direct unimpaired sum.)

  Entirety items to be sold  items 

 

Problem 6-15 Comprehensive Problem after a while Work Unroving [LO1, LO2, LO3, LO4]
[The forthcoming knowledge applies to the questions displayed adown.]
Far North Telecom, Ltd., of Ontario, has unembarrassed a new dispersion to construction and hawk specialty cellular telephones. The dispersion's monthly absorbs are shown adown:

  
  Manufacturing absorbs: 
    Varitelling absorbs per item: 
      Direct materials $88   
      Varitelling manufacturing aggravatehead $3   
  Unroving manufacturing aggravatehead absorbs (total) $220,400   
    Selling and functional absorbs: 
    Variable 12% of sales   
    Unroving (total) $163,000   
________________________________________

     Far North Telecom respects all of its workers as full-time employees and the society has a antiquated no layoff plan. Furthermore, issueion is greatly automated. Accordingly, the society includes its work absorbs in its unroving manufacturing aggravatehead. The cellular phones hawk for $330 each. During September, the primeval month of operations, the forthcoming spectre was recorded:

  
  Units consequenced 3,800 
  Units sold 3,000 
________________________________________
 
rev: 02-09-2011
references
Section Break Problem 6-15 Comprehensive Problem after a while Work Unroving [LO1, LO2, LO3, LO4] 

 


 1.
value:
20.00 purposes
 
 
Problem 6-15 Capability 1

Requirement 1:
(a) Compute the item issue absorb beneath Parching absorbing. (Omit the "$" indication in your acceptance.)

  Item issue absorb $  


 
(b) Compute the item issue absorb beneath Varitelling absorbing. (Omit the "$" indication in your acceptance.)

  Item issue absorb $  

2.
value:
20.00 purposes
 
 
Problem 6-15 Capability 2

Requirement 2:
Prepare an parching absorbing allowance declaration for September.(Input all amounts as absolute treasures. Omit the "$" indication in your acceptance.)

Requirement 3:
Prepare a assistance format allowance declaration for September using varitelling absorbing. (Input all amounts as absolute treasures negative net unhindered waste which should be implied by a minus indication. Omit the "$" indication in your acceptance.)

 Requirement 4:
Assume that the society must succeed subjoined financing in enjoin to live operations. As a part of top skill, would you advance to depend on the declaration in (2) over or in (3) over when parley after a while a clump of prospective investors?
 
rev: 02-09-2011
 
Absorption absorbing declaration
 
Varitelling absorbing declaration
Requirement 5:
Reconcile the parching absorbing and varitelling absorbing net unhindered allowances in capability 2 and 3 over. (Negative amounts should be implied by a minus indication. Omit the "$" indication in your acceptance.)
 
  
$      : Unroving manufacturing aggravatehead absorb deferred