Principles of Accounting II -ACCT 11 40 Test: Quiz CVP Chapter 20 This Question:

Question

Principles of Accounting II -ACCT 11 40 Test: Quiz CVP Chapter 20 This Question: 1 pt 4 of 4(3 The budgets of four companies yield the following information HB (Click the icon to view the budget information for the four companies) Read the tequrements Requirement 1. F? in the blanks for each missng valun CRound the contributon margin per un" to the nearest cen Baker Carey Doren Everest 26000 s 3,700 000 Net Sales Revenue Variable Costs Fixed Costs $ 288,000 144,000 260,000 68.750 78.000 208,000 s ????? operating Incom" aoss) $ 558.600 sse 600 s 60,500 ? Units Sold Contribution Margin per Unit $ Contribution Margin Ratio Requirements 2. and 3. Which Begin by showing the formula and then entering the amounts to 200,000 12,500 3.70 $ 72.00 s15.00 company has the lowest breakeven point in sales dollars? What causes the low br nearest whole dollar For example $10 25 would be calculate the breakeven point in sales dolars for e rounded to $11. Abbreviation used CM-contribution margin - Required sales in dollars Baker Carey Doren Everest Which company has the lowest breakeven point in sales dollars? What causes the low breakeven point? Choose from any list or enter any number in the input fields and then continue to the next question 2 4

Explanation / Answer

Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Paticulars Baker Net Sales Revenue     3,700,000.00 Variable costs = 3700,000 - 740,000     2,960,000.00 Contribution Margin =200000*3.70         740,000.00 Fixed Costs = 740000 - 558600         181,400.00 Operating income         558,600.00 Contribution Margin Ratio=740,000/3700,000 20.00% Units sold         200,000.00 Contribution margin per unit                      3.70 BEP in $ = 181400/20%         907,000.00 Paticulars Carey Net Sales Revenue=68750/(100%-20%)         343,750.00 Variable costs           68,750.00 Contribution Margin = 343750 - 68750         275,000.00 Fixed Costs         208,000.00 Operating income = 275000 - 208000           67,000.00 Contribution Margin Ratio 80.00% Units sold           12,500.00 Contribution margin per unit= 275000/12500                    22.00 BEP in $ = 208000/80%         260,000.00 Paticulars Doren Net Sales Revenue         288,000.00 Variable costs         144,000.00 Contribution Margin =288000-144000         144,000.00 Fixed Costs         260,000.00 Operating income = 144000 -260000       (116,000.00) Contribution Margin Ratio = 144000/288000 50.00% Units sold = 144000/72              2,000.00 Contribution margin per unit                    72.00 BEP in $ = 260000/50%         520,000.00 Paticulars Everest Net Sales Revenue = 78000/50%         156,000.00 Variable costs           78,000.00 Contribution Margin = Variable costs since CM ratio is 50% which means VC is also 50%           78,000.00 Fixed Costs = 78000 - 60500           17,500.00 Operating income           60,500.00 Contribution Margin Ratio 50.00% Units sold= 78000/15              5,200.00 Contribution margin per unit                    15.00 BEP in $ = 17500/50%           35,000.00 Everest has lowest BEP due to lower fixed costs

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