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hjlf
3 years ago
5

Blanchard Company manufactures a single product that sells for $180 per unit and whose total variable costs are $135 per unit. T

he company’s annual fixed costs are $562,500. (1) Prepare a contribution margin income statement for Blanchard Company showing sales, variable costs, and fixed costs at the break-even point. (2) Assume the company’s fixed costs increase by $135,000. What amount of sales (in dollars) is needed to break even?
Business
1 answer:
fomenos3 years ago
6 0

Answer:

Part (a)

At the break-even position, the Income Statement is as under:

Sales   12500 * $180                     $2,250,000

Variable costs  12500 * $135       <u>(</u><u>$1,687,500</u><u>)</u>

Contribution Margin                       $562,500

Fixed Cost                                      <u>($562,500)</u>

Profit for the year                              $0

Part (B)

The sales required to breakeven due to increased fixed cost is $2,790,000

Explanation:

The breakeven point at normal fixed costs is:

Breakeven Point = Fixed Cost / Contribution per unit

Putting values we have:

Breakeven Point = $562,500 / ($180 - $135)  = 12500 Units.

If the fixed costs increases by $135,000 which means the fixed cost becomes $697,500 then the breakeven point increases to:

Breakeven Point = $697,500 / ($180-135) = 15500 Units

The Sales required in dollars to breakeven on this new fixed cost level is:

Breakeven Sales = 15500 Units * 180 = $2,790,000

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Concord Company purchased equipment for $25200 on December 1. It is estimated that annual depreciation on the equipment will be
Ray Of Light [21]

Answer:

Debit Depreciation Expense, $525;

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Explanation:

Based on the information given in a situation where the financial statements are to be prepared on December 31, which means that the company should make the following adjusting entry:

Debit Depreciation Expense, $525

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Calculated as:

Debit depreciation expense $6,300/12

Debit depreciation expense=$525

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3 years ago
Refer to exhibit 20-2. the market for good x is initially in equilibrium at $5. the government then places a per-unit tax on goo
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Answer:

45%

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The market for good x is initially in equilibrium at $5. the government then places a per-unit tax on good x, as shown by the shift of s1 to s2.

As a result of the shift in the supply curve a new equilibrium price is established at $6.25

That implies that the share of the burden that consumers will bear is $1.25 (which represents 55% portion of the tax) - the difference between the previous and new equilibrium prices.

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3 years ago
The changes in account balances for Elder Company for 2018 are as follows: Assets $ 680,000 debit Common stock 350,000 credit Li
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Answer:

Net income will be $160000

So option (c) will be the correct answer

Explanation:

We have given debt common stock = $680000

Credit liabilities = 350000

Credit paid in capital = 190000

And excess of par 30,000 credit Assuming the only changes in retained earnings

So 680000 = 350000+190000+30000+ retained earning

So retained earning = $110000

Dividend paid = $50000

So net income = dividend paid + retained earning = $110000+$50000 = $160000

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4 0
3 years ago
Concord Corporation reported net income of $177,200 for 2017. Concord Corporation also reported depreciation expense of $35,230
klio [65]

Answer

Net income 177,200

+35230 depreciation

+4,920 loss on disposal

217,350 adjusted net income (a)

↑↓

↑AR -14,160

↑Prepaid -4,190

↑AP 17,220

Change in working Capital -1,130(b)

<u />

<u>Cash Flow generated from operating activities 216,220</u>

<u />

Explanation:

(a) we must remove the non-monetary account from the income statement

This means add the non-monetary expenses and losses

Subtract the non monetary revenue and gains

(b)

The increase in assets account have a negative meaning, because it is assumed the company used cash to adquire it.

Whiel increase in liabilities are positive, because the company receive aah or delay the payment of cash.

4 0
3 years ago
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