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vredina [299]
2 years ago
8

EXERCISE 5–4Computing and Using the CM Ratio [LO5–3] Guided Example 5-4 Last month when Holiday Creations, Inc., sold 50,000 uni

ts, total sales were $200,000, total variable expenses were $120,000, and fixed expenses were $65,000. Required: What is the company’s contribution margin (CM) ratio? Estimate the change in the company’s net operating income if it were to increase its total sales by $1,000.
Business
1 answer:
kari74 [83]2 years ago
8 0

Answer:

40% and $400

Explanation:

For computing the change in net operating income, first we have to determine the contribution margin ratio which is shown below:

Contribution margin per unit = Selling price per unit - Variable expense per unit  

= $4 -$2.4

=$1.6

And, Contribution margin ratio = (Contribution margin per unit) ÷ (selling price per unit) × 100

So, the Profit volume ratio = (1.6) ÷ (4) × 100 = 40%

Since the sale is increased by $1,000, so the change would be

= $1,000 × 40%

= $400

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Answer:

The statement would be:

Date: October 31, 2019

Net Income                $680,700

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The retained earnings are equal to the sum of declared dividends substracted  from the net income.

3 0
3 years ago
Terapin Company engages in the following external transactions for November. 1. Purchase equipment in exchange for cash of $23,4
uysha [10]

Answer:

Journal Entries

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Journal 3 :

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Explanation:

Narrations have been provided to explain the transaction. Remember to use the account titles provided in accounting for the transactions.

8 0
3 years ago
People are demanding more apartments than sellers are willing to offer. This means that there is a _____ of apartments. surplus
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People are demanding more apartments than sellers are willing to offer. This means that there is a shortage of apartments.
4 0
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mamaluj [8]

Answer:

No options presented but the entry below should be right.

$2,600 worth of merchandise was purchased but $600 was returned so Net accounts receivable:

= 2,600 - 600

= $2,000

Company paid the full amount on July 12 which is within the 10 days required for a discount so they get a 3% discount:

= 2,000 * ( 1 - 3%)

= $‭1,940‬

Date               Account details                                     Debit               Credit

July 12           Accounts Payable                               $2,000

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4 0
2 years ago
When the price of butter was "low," consumers spent $5 billion annually on its consumption. When the price doubled, consumer exp
faust18 [17]

Answer:

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