Ask Experts Questions for FREE Help !
Ask
    andreyveritas's Avatar
    andreyveritas Posts: 32, Reputation: 0
    Junior Member
     
    #1

    Oct 21, 2013, 10:19 PM
    Analyzing CVP relationships. (I did some of it. Need help with the rest.)
    Kincaid Company sells flags with team logos. Kincaid has fixed costs of $583,200 per year plus variable costs of $4.80 per flag. Each flag sells for $12.00.

    Requirements
    1. Use the income statement equation approach to compute the number of flags
    Kincaid must sell each year to break even.

    Answer: Breakeven sales in units 81,000 flags.

    2. Use the contribution margin ratio CVP formula to compute the dollar sales
    Kincaid needs to earn $33,000 in operating income for 2012. (Round the contribution margin to two decimal places.)

    Answer: $1,027,000

    3. Prepare Kincaid’s contribution margin income statement for the year ended
    December 31, 2012, for sales of 70,000 flags. Cost of goods sold is 65% of variable costs. Operating costs make up the rest of variable costs and all of fixed costs.
    (Round your final answers to the nearest whole number.)

    4. The company is considering an expansion that will increase fixed costs by 21% and variable costs by $0.60 per flag. Compute the new breakeven point in units and in dollars. Should Kincaid undertake the expansion? Give your reasoning.
    Round your final answers to the nearest whole number.

Check out some similar questions!

Over-analyzing everything [ 8 Answers ]

Heeey, I've never been like this before and I know I've always had an aniexty issue but this is just bad. Lately I've been over-anaylzing everything! How I was when I was a little kid till now... what disorder is this? Someone please help

Cvp [ 1 Answers ]

In order to estimate the contribution to profit of the charity event, it is first necessary to estimate the variable costs of catering the event. The costs of food, beverages, and labor are all apparently variable with respect to the number of guests. However, the situation with respect to overhead...

Over analyzing relationships [ 3 Answers ]

I have had tons of boyfriends in my life, but none of the relationships have lasted longer than a month. I know I seriously over analyze my relationships and boyfriends. I always ask myself things like: "What did it mean when he said/did that", "What if I would of done/said that.", "Will we last...


View more questions Search
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.