Abby Company manufactures and sells widgets. Current sales are 60,000 units. Sales $90/unit Variable Expenses...
80.2K
Verified Solution
Link Copied!
Question
Accounting
Abby Company manufactures and sells widgets. Current sales are 60,000 units.
Sales $90/unit
Variable Expenses 60/unit
Fixed Costs $1,000,000
REQURIED: (If need be, round to nearest unit or dollar)
1) Compute CM Ratio and Variable Expense Ratio
2) Compute Break-Even point in Units AND Dollars
3) How many units must be sold to earn a profit of $350,000?
4) Compute the Degree of Operating Leverage
5) If we gain 8% of sales, what % would Operating Income change (Use Operating Leverage)
6) Compute the Margin of Safety in $ AND %.
7) We want to improve profits so we are raising the sales price by $10.00 and reducing Variable Expenses by $3.00 and eliminating out $100,000 of Fixed Costs.
a) Determine new B/E Point in Units AND Dollars
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
