When income increases and the demand for a good increases, the good is considered a

Olongapo Sports Corporation distributes two premium golf balls—Flight Dynamic and Sure Shot. Monthly sales and the contribution

Strike441 [17]

Answer:

Product Flight Dynamic Sure Shot Total

Sales $660,000 $340,000 $1,000,000

CM ratio 63% 78% 68.1%

Contribution margin $415,800 $265,200 $681,000

Fixed expenses ($589,500)

Operating income $91,500

1. Prepare a contribution format income statement for the company as a whole.

Revenue $1,000,000

<u>Variable costs ($319000)</u>

Contribution margin $681,000

<u>Period costs ($589,500)</u>

Operating income $91,500

2. What is the company's break-even point in dollar sales based on the current sales mix?

break even point = fixed costs / CM ratio = $589,500 / 0.681 = $865,638.77

3. If sales increase by $59,000 a month, by how much would you expect the monthly net operating income to increase?

operating income would increase by $59,000 x 0.681 = $40,179

4 0

3 years ago

A firm is evaluating a proposal which has an initial investment of $50,000 and has cash flows of $15,000 per year for five years

Harlamova29_29 [7]

Answer:

3 1/3 years

Explanation:

Payback period is the time required for the inflows from a project to be equal to the initial outflow for the project. It is a key consideration in capital budgeting. It is usually assumed that the outlay or initial outflow is made in year 0 and the first inflow comes in after a year.

Year Cash outflow Cash inflow Balance

0 ($50,000) - ($50,000)

1 - $15,000 ($35,000)

2 - $15,000 ($20,000)

3 - $15,000 ($5,000)

4 - $15,000 $10,000

5 - $15,000 $25,000

Hence the payback period

= 3 years and 5000/15000 * 12 months

= 3 years 4 months

= 3 1/3 years

3 0

3 years ago

Connor, the manager of a shipping company, introduces a set of communications, activities, and facilities designed to change hea

eduard

Answer:

Employee wellness program

Explanation:

Based on the offerings, Connor has introduced an employee wellness program by making available a set of communications, activities, and facilities designed to change health-related behaviors in ways that reduce health risks and subsequent medical costs.

An employee wellness program which are undertaken by employers focuses on improving specific health risks, such as high blood pressure, high cholesterol levels, smoking, and obesity.

6 0

3 years ago

On January 2, Year 1, Jones Corporation purchased a truck for $39,000. The truck has a 5-year estimated life and a $4,000 estima

In-s [12.5K]

Answer:

Straight-line method:

depreciation expense year 1 = ($39,000 - $4,000) / 5 = $7,000
depreciation expense year 2 = $7,000
depreciation expense year 3 = $7,000
depreciation expense year 4 = $7,000
depreciation expense year 5 = $7,000

200 declining balance method:

depreciation expense year 1 = 2 x 1/5 x $39,000 = $15,600
depreciation expense year 2 = 2 x 1/5 x $23,400 = $9,360
depreciation expense year 3 = 2 x 1/5 x $14,040 = $5,616
depreciation expense year 4 = 2 x 1/5 x $8,424 = $3,369.60
depreciation expense year 5 = $5,054.40 - $4,000 = $1,054.40

Sum-of-years-digits method:

depreciation expense year 1 = 5/15 x $35,000 = $11,666.67
depreciation expense year 2 = 4/15 x $35,000 = $9,333.33
depreciation expense year 3 = 3/15 x $35,000 = $7,000
depreciation expense year 4 = 2/15 x $35,000 = $4,666.67
depreciation expense year 5 = 1/15 x $35,000 = $2,333.33

8 0

3 years ago

A contribution approach income statement ______. reports both gross margin and net income is prepared primarily for external rep

kvasek [131]

Answer:

separates costs into fixed and variable component

can assist with management decision making

Explanation:

The contribution margin may be defined as when we deduct the expenses of the variable from sales. Where contribution margin shows the organization revenue is contributing to net income and fixed cost.

The statement of contribution margin income tells of the earnings at various stages of operations.

This report of income is not used for external reporting purposes but rather for internal decision making by the management.

Therefore according to the above description, the last two statements are correct.

6 0

2 years ago