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bonufazy [111]
3 years ago
8

Raner, Harris & Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm h

as two offices—one in Chicago and one in Minneapolis. The firm classifies the direct costs of consulting jobs as variable costs. A contribution format segmented income statement for the company’s most recent year is given:
Office
Total Company Chicago Minneapolis
Sales $450,000 100% $150,000 100% $300,000 100%
Variable expenses 225,000 50% 45,000 30% 180,000 60%

Contribution margin 225,000 50% 105,000 70% 120,000 40%
Traceable fixed expenses 126,000 28% 78,000 52% 48,000 16%

Office segment margin 99,000 22% $27,000 18% $72,000 24%
Common fixed expenses not traceable to offices 63,000 14 %
Net operating income $36,000 8%

Required:
(1) Compute the companywide break-even point in dollar sales.

Business
1 answer:
Snezhnost [94]3 years ago
6 0

Answer:

The Break Even Point is the Sales Value that will cover the cost of production. Meaning the Sales Value that will bring profitability to Zero

Break Even sales for Company wide =  $378,000

Break Even Value for Chicago is $111,429

And Break Even Value for Minneapolis is $120,000

The Addition of both Outlets/Offices Break Even Sales is less than the Company-wide because the Offices don't share in the Common Fixed Expense as these are specific to Group reporting.

Explanation:

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Riggs Company purchases sails and produces sailboats. It currently produces 1,300 sailboats per year, operating at normal capaci
mr_godi [17]

Answer:

The president of Riggs has missed something.

She should make the Sail instead of buying because its cheaper to manufacture than purchasing it outside.

Explanation:

<u>Cost of Manufacturing the Sails:</u>

Direct materials        $93

Direct Labor              $83

Total                         $173

The president of Riggs has included the $90 overhead  based on $78,000 of annual fixed overhead that is allocated using normal capacity in the cost of manufacturing the sail which is incorrect.

Riggs Company is operating at 80 % of full capacity, hence utelizing the 20% excess capacity would not expand its fixed costs.

Thus said the current fixed cost are irrelevent for this decison and would be incurred whether or not Riggs Company utilizes the excess capacity

<u>Conclusion:</u>

The cost of making the sail is $173 which is lower than the cost of buying them at $ 258.

I would advise The president of Riggs to make the sail by utilizing the excess capacity since its cheaper than purchasing it outside.

5 0
3 years ago
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All of the following are factors of production EXCEPT: A. capital) B. labor) C. currency) D. land)
daser333 [38]

capital production

pls mark brainliest

5 0
3 years ago
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An attractive business climate is defined by only one dimension: it minimizes the political risk to a company.
kari74 [83]
I believe the correct answer is false. <span>An attractive business climate is not defined by only one dimension: it minimizes the political risk to a company. Other than this, there are other indicators present. Hope this answers the question. Have a nice day.</span>
4 0
3 years ago
One idea for reducing cyberloafing is to develop software that recognizes and categorizes Internet sites into sites that employe
WITCHER [35]
I think true hope I helped
8 0
3 years ago
Cinnamon Corp. started business in 2007, uses a periodic inventory system and uses the weighted average cost method. During 2007
Nesterboy [21]

Answer:

€4,883,000

Explanation:

The computation of cost of sales is shown below:-

Inventory = 35,000 ÷ €12

= 2,917 units

Weighted average cost of inventory

= (2,917 × €12) + (35,000 × €14)

=  €35,004 + €490,000

= €525,004

So weighted average cost = €525,004 ÷ €40,833.33

= €12.85

So, cost of sales = weighted average cost × sold units

= €12.85 × 38,000

= €4,883,000

3 0
4 years ago
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