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zepelin [54]
3 years ago
12

Blanchard Company manufactures a single product that sells for $140 per unit and whose total variable costs are $112 per unit. T

he company’s annual fixed costs are $623,000. The sales manager predicts that annual sales of the company’s product will soon reach 39,300 units and its price will increase to $193 per unit. According to the production manager, variable costs are expected to increase to $133 per unit, but fixed costs will remain at $623,000. The income tax rate is 30%. What amounts of pretax and after-tax income can the company expect to earn from these predicted changes? Prepare a forecasted contribution margin income statement.
Business
1 answer:
aleksley [76]3 years ago
3 0

Answer:

Blanchard Company's Predicted Income Statement:

Sales (39,300 x $193) - $7,584,900

VC (39,300 x $133) - ($5,226,900)

Contribution - $2,358,000

FC - ($623,000)

Pre-Tax Income $1,735,000

Income Tax 30% ($520,500)

After Tax Income $1,214,500

Explanation:

a) The contribution is the product of sales revenue less variable cost.  The contribution per unit is equal to sales price less variable cost per unit, multiplied by quantity.  Predicted quantity is 39,300 and contribution per unit is $60 ($193 - $133).  This gives a total contribution of $2,358,000 (39,300 x $60).

b) The Pre-Tax Income is contribution less Fixed Cost.  This gives us $1,735,000 ($2,358,000 - $623,000).

c) The After-Tax Income is obtained after applying 30% tax rate on the Pre-Tax Income of $1,735,000.  This gives us $1,214,500.

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Suppose the United States removes the sugar quotas and the market price of sugar drops. Since sugar is an input in chocolate, we
8090 [49]

Answer:

The consumer surplus will definitely increase.

Explanation:

The reason is that the manufacturers have purchased the sugar at a high price and now it is available at a lower price. So this means that the price of chocolate must decrease in the market if the price of material input is fallen. But the chocolate prices will take time to fall and as the result the customer is willing to pay lower prices but he is forced to pay more because the manufactured chocolates include sugar which was bought at a higher price. So the consumer surplus will increase.

4 0
3 years ago
Productivity is defined as the quantity of a. labor required to produce one unit of goods and services. b. goods and services pr
Bumek [7]

Answer:

Option (C) is correct.

Explanation:

Productivity of labor refers to the term which is used by the firms for knowing the efficiency of the labor employed into the production of the output.

Productivity is determined by dividing the output of the firm by the inputs used in the production of the goods and services.

Productivity = (Output ÷ Input)

If the productivity of the labor is not achieved as per the company requirement then there is a fall in the labor employment.

8 0
3 years ago
Talks-A-Lot, Inc. sells cell phones to customers and expects that 5% of phones sold will be returned for repair under its warran
ivann1987 [24]

Answer:

Warranty liability $2,128

Explanation:

680 phones sold x 5% x $76 per repaired phone = $2,584 total warranty liability

6 phones were repaired during the year x $76 =  $456

remaining warranty liability = total estimated liability - money spent repairing phones during the year = $2,584 - $456 = $2,128

total outstanding warranty liability = $2,128

Since phone warranties last less than a year, the full amount should be recorded under current liabilities.

5 0
3 years ago
Dish Corporation acquired 100 percent of the common stock of Toll Company by issuing 10,000 shares of $10 par common stock with
ASHA 777 [7]

Answer:

a) $2,550,000

b) $1,550,000

c)$1,000,000

d) Goodwill is $50,000

Explanation:

Part A) Determine the total Assets of the business to be used in the consolidated balance sheet

The consolidated Total Asset for Dish Corporation and Toll Company is as follows:

The Book value of the assets of Dish + Toll's assets fair value + The goodwill

How to calculate the goodwill

First, dish paid the following for acquiring Toll = $10,000 @ $60 = $600,000

Secondly, The net worth of Toll at the time was = $1,300,000- $750,000 (Assets- Liabilities)= $550,000

The Good will = $600,000- $550,000

= $50,000

<u>Calculate Consolidated Asset</u>

The Book value of the assets of Dish + Toll's assets fair value + The goodwill

= $1,200,000 + $1,300,000 + $50,000 = $2,550,000

Part b) Total Liabilities

The book value of Dish Corporation Liabilities + The Fair value of Toll Liabilities

= $800,000 + $750,000 = $1,550,000

Part c) The total or consolidated Equity =

The formula for equity at this point = The Total Assets (Part A) - The Total Liabilities (Part b)

= $2,550,000 - $1,550,000

=$1,000,000

7 0
3 years ago
Stimpleton Company engages in the following cash payments: Purchase equipment $ 3,600 Pay rent 600 Repay loan to the bank 5,000
Svetradugi [14.3K]

Answer:

$1,100

Explanation:

The operating activities are the activities that are include day to day transaction which would result in cash receipts and the cash payments

The cash receipts would be in terms of received cash from customers and the cash payments would be salary expenses, utilities expenses, etc that are paid in cash.

So, the total amount of cash paid for operating activities is

= Rent paid + workers salaries paid

= $600 + $00

= $1,100

8 0
3 years ago
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