Norman Corporation has provided its contribution format inco…
Norman Corporation has provided its contribution format income statement: Sales $ 426,400 Variable expenses 260,000 Contribution margin 166,400 Fixed expenses 120,900 Net operating income $ 45,500 Given the company’s degree of operating leverage, if the company’s sales increase by 7%, its net operating income should increase by about:
Read DetailsDenmark Inc. has provided the following income statement. As…
Denmark Inc. has provided the following income statement. Assume that the following information is within the relevant range. Sales (7,000 units) $ 210,000 Variable expenses 136,500 Contribution margin 73,500 Fixed expenses 35,700 Net operating income $ 37,800 The number of units that must be sold to achieve a target profit of $31,500 is closest to:
Read DetailsPortland Corporation has provided the following data for its…
Portland Corporation has provided the following data for its two most recent years of operation: Selling price per unit $ 76 Manufacturing costs: Variable manufacturing cost per unit produced: Direct materials $ 12 Direct labor $ 6 Variable manufacturing overhead $ 3 Fixed manufacturing overhead per year $ 264,000 Selling and administrative expenses: Variable selling and administrative expense per unit sold $ 4 Fixed selling and administrative expense per year $ 74,000 Year 1 Year 2 Units in beginning inventory 0 2,000 Units produced during the year 11,000 13,000 Units sold during the year 9,000 14,000 Units in ending inventory 2,000 1,000 The net operating income under absorption costing in Year 1 is closest to:
Read DetailsSouthern Corporation produces and sells a single product. Da…
Southern Corporation produces and sells a single product. Data concerning that product appear below: Per Unit Percent of Sales Selling price $ 140 100 % Variable expenses 42 30 % Contribution margin $ 98 70 % Fixed expenses are $490,000 per month. The company is currently selling 6,000 units per month. Management is considering using a new component that would increase the unit variable cost by $6. Since the new component would increase the features of the company’s product, the marketing manager predicts that monthly sales would increase by 500 units. What should be the overall effect on the company’s monthly net operating income of this change?
Read DetailsMuller Corporation manufactures two products: Product MS7 an…
Muller Corporation manufactures two products: Product MS7 and Product RD6. The company uses a plantwide overhead rate based on machine-hours. The following additional information is available for the company and for Products MS7 and RD6. Activity Cost Pool Activity Measure Total Cost Total Activity Machining Machine-hours $ 120,000 6,000 MHs Machine setups Number of setups $ 90,000 150 setups Product design Number of products $ 84,000 2 products General factory Direct labor-hours $ 300,000 10,000 DLHs Activity Measure Product MS7 Product RD6 Machine-hours 4,000 2,000 Number of setups 90 60 Number of products 1 1 Direct labor-hours 7,000 3,000 Using the plantwide overhead rate, the percentage of the total overhead cost that is allocated to Product MS7 is closest to:
Read DetailsA company that produces a single product has provided the fo…
A company that produces a single product has provided the following data concerning its most recent month of operations: Selling price $ 121 Units in beginning inventory 0 Units produced 7,000 Units sold 6,500 Units in ending inventory 400 Variable costs per unit: Direct materials $ 38 Direct labor $ 53 Variable manufacturing overhead $ 3 Variable selling and administrative expense $ 7 Fixed costs: Fixed manufacturing overhead $ 45,000 Fixed selling and administrative expense $ 28,000 What is the total period cost for the month under variable costing?
Read DetailsYanni Corporation has two divisions: the East Division and t…
Yanni Corporation has two divisions: the East Division and the West Division. The corporation’s net operating income is $12,000. The East Division’s divisional segment margin is $20,000 and the West Division’s divisional segment margin is $31,000. What is the amount of the common fixed expense not traceable to the individual divisions?
Read Details