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zhuklara [117]
3 years ago
6

Calculating Contribution Margin and Contribution Ratio, Preparing Contribution Margin Income Statement [LO 5-5]Riverside Inc. ma

kes one model of wooden canoe. Partial information for it follows:Number of Canoes Produced and Sold 400 600 750Total costsVariable costs $ 54,000 $ 81,000 $ 101,250Fixed costs 60,000 60,000 60,000Total costs $ 114,000 $ 141,000 $ 161,250Cost per unitVariable cost per unit $ 135.00 $ 135.00 $ 135.00Fixed cost per unit 150.00 100.00 80.00Total cost per unit $ 285.00 $ 235.00 $ 215.00Riverside sells its canoes for $370 each. Next year Riverside expects to sell 1,000 canoes.Required:Complete the Riverside’s contribution margin income statement for each independent scenario.
Business
1 answer:
Lyrx [107]3 years ago
5 0

Answer:

64% it's the contribution margin of the company.

Explanation:

To find the contribution margin we need to find the gross profit which is the total sales minus the variable cost of goods, te contribution margin doesn't include the fixed costs only the variable ones.

Income Statement    

Quantities                    400      600              750           1.000  

Sales                      $148,000   $222,000   $277,500   $370,000  

Cost of goods sold     -$54,000  -$81,000         -$101,250  -$135,000  

Contribution Margin  $94,000  $141,000    $176,250   $235,000  

                                       64%       64%                 64%             64%

Fixed Cost                -$60,000  -$60,000   -$60,000  -$60,000  

Total Cost                 -$114,000  -$141,000      -$161,250  -$195,000  

Operating Income          $34,000    $81,000    $116,250   $175,000  

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Explanation:

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iragen [17]

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3 years ago
Walker Company prepares monthly budgets. The current budget plans for a September ending merchandise inventory of 27,000 units.
Irina-Kira [14]

Answer:

------- JULY AUGUST. SEPTEMBER

Sales 210,000. 300,000 270,000

Ending. 45,000. 40,500. 27,000

total

required. 255,000. 340,500. 297,000

Beginning (31,500) (45,000) (40,500)

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Explanation:

the ending would be next month sales times 15%

July ending

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August Ending

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270,000 x 15% = 40,500

September Ending

October sales x 15%

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we will add the sales and the desired ending to get the total required for each month

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6 0
3 years ago
A firm incurs $400 to manufacture a television. In the market, customers are willing to pay a maximum of $600 for the television
kotykmax [81]

Answer:

D. Economic value created.    

Explanation:

The reason is that the economic value created is the difference between the price the customer is willing to pay and the cost that the product actually costs to the firm.

Following is the formula for calculation of economic value created:

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Here the television costs $400 to the firm and the customer is willing to pay $600 for the television. So by putting the values we have:

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Monthly payment because she pays it every 30 days
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