143. Mcallister Corporation has provided the following data concerning its only product:
Selling price $150 per unit
Current sales 39,900 units
Break-even sales 31,521 units
The margin of safety as a percentage of sales is closest to:
144. The July contribution format income statement of Raiche Corporation appears below:
Sales $510,600
Variable expenses 255,300
Contribution margin 255,300
Fixed expenses 217,300
Net operating income $38,000
The degree of operating leverage is closest to:
145. The July contribution format income statement of Raiche Corporation appears below:
Sales $510,600
Variable expenses 255,300
Contribution margin 255,300
Fixed expenses 217,300
Net operating income $38,000
If the company’s sales increase by 5%, its net operating income should increase by about:
146. Stoppkotte Corporation has provided its contribution format income statement for April.
Sales $703,000
Variable expenses 444,000
Contribution margin 259,000
Fixed expenses 184,200
Net operating income $74,800
The degree of operating leverage is closest to:
147. Stoppkotte Corporation has provided its contribution format income statement for April.
Sales $703,000
Variable expenses 444,000
Contribution margin 259,000
Fixed expenses 184,200
Net operating income $74,800
If the company’s sales increase by 10%, its net operating income should increase by about:
148. Froio Corporation produces and sells two products. Data concerning those products for
the most recent month appear below:
Product M06M Product Q20I
Sales $11,000 $38,000
Variable expenses $2,420 $16,690
Fixed expenses for the entire company were $26,570.
If the sales mix were to shift toward Product M06M with total sales remaining constant, the
overall break-even point for the entire company:
149. Froio Corporation produces and sells two products. Data concerning those products for
the most recent month appear below:
Product M06M Product Q20I
Sales $11,000 $38,000
Variable expenses $2,420 $16,690
Fixed expenses for the entire company were $26,570.
The break-even point for the entire company is closest to:
150. Gilpatric Corporation produces and sells two products. In the most recent month, Product
Q71M had sales of $28,000 and variable expenses of $7,840. Product V04P had sales of $49,000
and variable expenses of $27,580. The fixed expenses of the entire company were $34,630.
The break-even point for the entire company is closest to:
151. Gilpatric Corporation produces and sells two products. In the most recent month, Product
Q71M had sales of $28,000 and variable expenses of $7,840. Product V04P had sales of $49,000
and variable expenses of $27,580. The fixed expenses of the entire company were $34,630.
If the sales mix were to shift toward Product Q71M with total sales remaining constant, the
overall break-even point for the entire company:
152. In December, Mccullum Corporation sold 2,900 units of its only product. Its total sales
were $281,300, its total variable expenses were $130,500, and its total fixed expenses were
$122,600.
Required:
a. Construct the company’s contribution format income statement for December.
b. Redo the company’s contribution format income statement assuming that the company sells
3,100 units.
153. Marano Corporation produces and sells a single product. In October, the company sold
6,200 units. Its total sales were $223,200, its total variable expenses were $105,400, and its total
fixed expenses were $100,400.
Required:
a. Construct the company’s contribution format income statement for October.
b. Redo the company’s contribution format income statement assuming that the company sells
6,400 units.
154. Gonyo Inc., which produces and sells a single product, has provided the following
contribution format income statement for December:
Sales (3,200 units) $252,800
Variable expenses 118,400
Contribution margin 134,400
Fixed expenses 113,600
Net operating income $20,800
Required:
Redo the company’s contribution format income statement assuming that the company sells
3,400 units.
155. Buentello Corporation produces and sells a single product. The company’s contribution
format income statement for January appears below:
Sales (1,900 units) $55,100
Variable expenses 22,800
Contribution margin 32,300
Fixed expenses 24,900
Net operating income $7,400
Required:
Redo the company’s contribution format income statement assuming that the company sells
1,600 units.
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156. The following is Arkadia Corporation’s contribution format income statement for last
month:
Sales $1,200,000
Variable expenses 800,000
Contribution margin 400,000
Fixed expenses 300,000
Net operating income $100,000
The company has no beginning or ending inventories and produced and sold 20,000 units during
the month.
Required:
a. What is the company’s contribution margin ratio?
b. What is the company’s break-even in units?
c. If sales increase by 100 units, by how much should net operating income increase?
d. How many units would the company have to sell to attain a target profit of $125,000?
e. What is the company’s margin of safety in dollars?
f. What is the company’s degree of operating leverage?
157. The management of Pacubas Corporation expects sales in July to be $121,000. The
company’s contribution margin ratio is 64% and its fixed monthly expenses are $40,000.
Required:
Estimate the company’s net operating income for July, assuming that the fixed monthly expenses
do not change. Show your work!
158. Bianchini Corporation’s contribution margin ratio is 58% and its fixed monthly expenses
are $94,000. Assume that the company’s sales for May are expected to be $178,000.
Required:
Estimate the company’s net operating income for May, assuming that the fixed monthly
expenses do not change. Show your work!
159. Gaskey Inc. expects its sales in February to be $173,000. The company’s contribution
margin ratio is 58% and its fixed monthly expenses are $94,000.
Required:
Estimate the company’s net operating income for February, assuming that the fixed monthly
expenses do not change. Show your work!
160. Larita Corporation produces and sells a single product. Data concerning that product
appear below:
Per Unit Percent of Sales
Selling price $190 100%
Variable expenses 38 20%
Contribution margin $152 80%
Fixed expenses are $243,000 per month. The company is currently selling 2,000 units per month.
Required:
The marketing manager believes that a $28,000 increase in the monthly advertising budget
would result in a 180 unit increase in monthly sales. What should be the overall effect on the
company’s monthly net operating income of this change? Show your work!
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161. Wrobbel Corporation produces and sells a single product. Data concerning that product
appear below:
Per Unit Percent of Sales
Selling price $150 100%
Variable expenses 90 60%
Contribution margin $60 40%
Fixed expenses are $307,000 per month. The company is currently selling 6,000 units per month.
Required:
Management is considering using a new component that would increase the unit variable cost by
$2. Since the new component would improve the company’s product, the marketing manager
predicts that monthly sales would increase by 200 units. What should be the overall effect on the
company’s monthly net operating income of this change if fixed expenses are unaffected? Show
your work!