QUESTION 11 Jacobbsson Organics makes industrial cement and has supplied the fol
ID: 2409009 • Letter: Q
Question
QUESTION 11 Jacobbsson Organics makes industrial cement and has supplied the following data Bags produced and sold Sales revenue Variable Manuf. Expense Fixed manufacturing expense Variable selling and adm. Expense Fixed selling& Administrative 680,000 $ 4,352,000 1,972,000 730,000 782,000 412.000 Required (Do not use the tab key, only the space bar and return key) al Prepare a contribution format income statement for the fiscal year ended January 31, 2019 b] Compute breakeven, both unit breakeven and dollar breakeven. [c) Compute the Net Operating income if the sales revenue increases 30% T T I Anal3(12p0 Click Save and Submit to save and submit. Cliek Save All Answers to save all answers Save All AnswaExplanation / Answer
Requirement (a) - Contribution format income statement for the fiscal year ended January 31, 2019
Jacobbsson Organics
Contribution format income statement
For the fiscal year ended January 31, 2019
Particulars
Amount ($)
Amount ($)
Sales
43,52,000
Variable Expenses
Variable Manufacturing Expenses
19,72,000
Variable Selling and Administrative Expenses
782,000
(27,54,000)
Contribution margin
15,98,000
Fixed expenses:
Fixed Manufacturing Expenses
730,000
Fixed Selling and Administrative Expenses
412,000
(11,42,000)
Net Operating Income
$456,000
Requirement (b), Break-Even in units and in Dollar Amounts
Contribution per unit = Contribution margin / Units produced and sold
= $15,98,000 / 680,000
= $2.35 per bag
Contribution margin ratio = [ 15,98,000 / 43,52,000 ] x 100 = 36.72%
Break-Even in units = Total Fixed Costs / Contribution per unit
= $11,42,000 / $2.35
= 485,957 Units
Break-Even in Dollars = Break-Even in units x Selling price per unit
= 485,957 Units x $6.40 per unit
= $3,110,124.80
Requirement (c), Net Operating Income if the sales revenue increased by 30%
Jacobbsson Organics
Contribution format income statement
For the fiscal year ended January 31, 2019
Particulars
Amount ($)
Amount ($)
Sales [ $43,52,000 x 130% ]
56,57,600
Variable Expenses
Variable Manufacturing Expenses [ 19,72,000 x 130% ]
2,563,600
Variable Selling and Administrative Expenses
[ 782,000 x 130% ]
1,016,600
(3,580,200)
Contribution margin
2,077,400
Fixed expenses:
Fixed Manufacturing Expenses
730,000
Fixed Selling and Administrative Expenses
412,000
(11,42,000)
Net Operating Income
$935,400
If the sales revenue increased by 30%, then the net operating would increase to $935,400 from $456,000
Jacobbsson Organics
Contribution format income statement
For the fiscal year ended January 31, 2019
Particulars
Amount ($)
Amount ($)
Sales
43,52,000
Variable Expenses
Variable Manufacturing Expenses
19,72,000
Variable Selling and Administrative Expenses
782,000
(27,54,000)
Contribution margin
15,98,000
Fixed expenses:
Fixed Manufacturing Expenses
730,000
Fixed Selling and Administrative Expenses
412,000
(11,42,000)
Net Operating Income
$456,000
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