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 &quot;0&quot; 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

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

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.