Managerial Accounting
5 Questions
Difficulty: Beginners
Just need the answers no explanations so you can finish as fast as you want.
Assignment is attached in pdf format
Wheeler Corporation?s most recent income statement follows:
Sales (8,000 units)
Variable expenses
Total
$208,000
144,000
Contribution margin
Fixed expenses
Net operating income
64,000
56,000
$
Per Unit
$26.00
18.00
$ 8.00
8,000
Required:
Prepare a new contribution format income statement under each of the following conditions (consider each
case independently):
1. The sales volume increases by 50 units. (Input all amounts as positive values except losses which
should be indicated by a minus sign.)
Contribution Income Statement
(Click to select)
(Click to select)
(Click to select)
Total
(Click to select)
(Click to select)
$
$
2. The sales volume declines by 50 units. (Input all amounts as positive values except losses which
should be indicated by a minus sign.)
Contribution Income Statement
(Click to select)
(Click to select)
(Click to select)
Total
(Click to select)
(Click to select)
$
$
3. The sales volume is 7,000 units. (Input all amounts as positive values except losses which should
be indicated by a minus sign. Leave no cells blank – be certain to enter "0" wherever required.)
Contribution Income Statement
(Click to select)
(Click to select)
(Click to select)
(Click to select)
(Click to select)
$
Hints
Hint #1
References
Worksheet
Difficulty: Medium
Exercise 5-1
Preparing a
Contribution
Format Income
Statement [LO1]
Learning Objective:
05-01 Explain how
changes in activity
affect contribution
margin and net
operating income.
$
Total
Required:
1-a. The marketing manager believes that an $8,000 increase in the monthly advertising budget would
increase monthly sales by $15,000. Calculate the increase or decrease in net operating income.
Net operating income
(Click to select) by
1-b. Should the advertising budget be increased?
Yes
No
Hints
Hint #1
References
Worksheet
Difficulty: Medium
Exercise 5-5
Part 1
Learning Objective:
05-04 Show the
effects on net
operating income of
changes in variable
costs, fixed costs,
selling price, and
volume.
$
Required:
1. Using the equation method, determine the unit sales that are required to earn a target profit of $6,000.
Unit sales
units
Hints
Hint #1
References
Worksheet
Difficulty: Medium
Exercise 5-6
Part 1
Learning Objective:
05-05 Determine the
level of sales needed
to achieve a desired
target profit.
2. Using the formula method, determine the dollar sales that are required to earn a target profit of $8,000.
Dollar sales
$
Hints
Hint #1
References
Worksheet
Difficulty: Medium
Exercise 5-6
Part 2
Learning Objective:
05-05 Determine the
level of sales needed
to achieve a desired
target profit.
Maxson Products distributes a single product, a woven basket whose selling price is $8 and whose variable
cost is $6 per unit. The company?s monthly fixed expense is $5,500.
Required:
1. Compute for the company?s break-even point in unit sales using the equation method.
Break-even point in unit sales
baskets
2. Compute for the company?s break-even point in sales dollars using the equation method and the CM
ratio. (Do not round intermediate calculations. Round your CM ratio to 2 decimal places.)
CM ratio
Break-even point in dollar sales
$
3. Compute for the company?s break-even point in unit sales using the formula method.
Break-even point in unit sales
baskets
4. Compute for the company?s break-even point in sales dollars using formula method and the CM ratio.
(Do not round intermediate calculations. Round your CM ratio to 2 decimal places.)
CM ratio
Break-even point in dollar sales
Hints
Hint #1
References
$
Worksheet
Difficulty: Medium
Exercise 5-7
Compute the
Break-Even
Point [LO6]
Learning Objective:
05-06 Determine the
break-even point.