1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
grandymaker [24]
3 years ago
12

Cost-Volume Profit Analysis Recline Company is planning to produce and sell 11,250 units of its only product at a unit price of

$106. At this sales level Recline Company will generate $405,000 in total contribution margin and incur fixed costs of $25/unit. a. Calculate Recline’s contribution margin ratio. Round answer to the nearest whole percentage (ex: 0.3456 = 35%) Answer % b. Calculate the break-even point in sales dollars for Recline. Use your rounded answer from part a. above and then round final answer to the nearest dollar. $Answer
Business
1 answer:
Anarel [89]3 years ago
5 0

Answer:

Calculate Recline’s contribution margin ratio.  

Contribution Margin RATIO  34%

Calculate the break-even point in sales dollars for Recline.    

Break-Even Point  $1.030.556

Explanation:

  • The contribution margin it's determined by the total amount of Gross Profit divided by the total value of sales. To this case $405,000/$1,192,500 = 34%

      Income Statement

11.250       Quantities

$106          Unit Price

$1,192,500 Sales

-$787,500 Cost of goods sold

$405,000 Contribution Margin  34%

-$281,250 Fixed Cost

$123,750 Operating Income

  • The Break Even point it's when the Operating Income is equal to zero, it means the lowest level of sales the company can afford and not loss money.

 BREAK EVEN POINT

9.722        Quantities

$106         Unit Price

$1,030,556 Sales

-$787,500 Cost of goods sold

$243,056 Contribution Margin

-$243,056 Fixed Cost

$0            Operating Income

You might be interested in
The following information relates to a product produced by Orca Company: Fixed selling costs are $1,000,000 per year. Although p
julia-pushkina [17]

Answer,:

increase in operating income by $840,000

Explanation:

The computation is shown below:

Offer price per unit $60

Less: Variable costs per unit:  

  Direct materials ($20)

  Direct labor ($14)

  Variable overhead ($12)

  Variable selling $0

Incremental profit per unit (a) $14

Units offered to sell (b) 60,000

Effect on Operating Income (Increase) (a × b) $840,000

Therefore, in the case when the special order is accepted, the effect on operating income would be increase by $840,000

4 0
2 years ago
Bruce receives 20 stock rights in a nontaxable distribution. The stock rights have an FMV of $5,000. The common stock with respe
svlad2 [7]

Answer:

c. $5,000

Explanation:

Bruce can deduct loss of $5,000

4 0
2 years ago
A company produces and sells a consumer product and is able to control the demand for the product by varying the selling price.
Yuki888 [10]

A company produces and sells a consumer product and is able to control the demand for the product by varying the selling price. The approximate relationship between price and demand is 50 units.

p = 38 + (2,700 / D) - (5,000 / D2)

Marginal (variable) cost (MC) = 40

(a) Profit is maximized by equality of Marginal revenue (MR) and MC.

Total revenue (TR) = p x D = 38D + 2,700 - (5,000 / D)

MR = dTR / dD = 38 + (5,000 / D2)

Equating MR with MC,

38 + (5,000 / D2) = 40

5,000 / D2 = 2

D2 = 2,500

Taking positive square root on each side,

D = 50

(b) When D = 50, from demand function we get

p = 38 + (2,700 / 50) - (5,000 / 2,500) = 38 + 54 - 2 = $90 (Profit-maximizing price)

Profit (\pi) ($) = Total Revenue - Total Costs = TR - (Fixed cost + Total variable cost) = (p x D) - (1,000 + 40D)

= 38D + 2,700 - (5,000 / D) - 1,000 - 40D

= 1,700 - 2D - (5,000 / D)

Profit is maximized when d\pi/dD = 0 and d2\pi/dD2 < 0.

First order condition: d\pi/dD = - 2 + (5,000 / D2)

Second order condition: d2\pi/dD2 = d/dD(d\pi/dD) = - 2 x (5,000 / D3) = - 10,000 / D3

Since D > 0, (- 10,000 / D3) < 0, which proves that profit is maximized when company produces = 50 units.

Learn more about the company products at

brainly.com/question/19649017

#SPJ4

8 0
2 years ago
How does capital play an important role in the other factors of production?
OverLord2011 [107]

Answer:

Capital is an important factor of production because it's what allows labor and land to be purchased.

Explanation:

capital can be the money that companies use to buy resources, as well as the physical assets companies use when producing goods or services, such as factories and machinery.

7 0
3 years ago
Read 2 more answers
A subject property has a swimming pool (worth $5,000) and a three-car garage (worth $4,500). Comp property A has a pool only and
AnnyKZ [126]

Answer and Explanation:

The calculation of the adjusted price that could use for these two comps in a CMA is given below:

For Comp property A, the value of the garage should be

= $452,500 + $4,500

= $457,000

And, for comp property B, the value of the pool should be

= $446,000 + $5,000

= $451,000

In this way, it should be considered

4 0
3 years ago
Other questions:
  • Is it preferable for central banks to primarily target inflation or unemployment? Why?
    15·1 answer
  • Brad, an employee for a sports marketing firm, feels he has been treated unfairly by the organization. He helped three other emp
    5·1 answer
  • Smith Inc. purchased a piece of equipment for $850,000 on March 1, 2019 paying $80,000 in down payment and signing a note for th
    12·1 answer
  • To fight the ongoing inflation the central bank reduces the supply of money by 30%. the long-run effect of this policy on the re
    15·1 answer
  • The Sunny Hills school district always has a flood of applicants because of the continuous learning opportunities they provide a
    5·1 answer
  • White Company has two departments, Cutting and Finishing. The company uses a job-order costing system and computes a predetermin
    9·1 answer
  • What are chemical contaminants?
    10·2 answers
  • Carbonale Castings produces cast bronze valves on a 10-person assembly line. On a recent day, 160 valves were produced during an
    13·1 answer
  • While developing a new product, in the product development stage, the first versions of products are used in further consumer te
    10·1 answer
  • What would be the expected rate of return for each company, according to the capital asset pricing model (capm)?
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!