Answer
The answer and procedures of the exercise are attached in the following archives.
Explanation
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
Answer:
operating Income = Sales – Variable Costs – Fixed Costs
A CVP analysis is used to determine the sales volume required to achieve a specified profit level. Therefore, the analysis reveals the break-even point where the sales volume yields a net operating income of zero and the sales cutoff amount that generates the first dollar of profit.
Cost-volume profit analysis is an essential tool used to guide managerial, financial and investment decisions.
COST-VOLUME PROFIT ANALYSIS
Contribution Margin and Contribution Margin Percentage
The first step required to perform a CVP analysis is to display the revenue and expense line items in a Contribution Margin Income Statement and compute the Contribution Margin Ratio.
Answer:
d. $1,600 less than under absorption costing.
Explanation:
The computation of the carrying value on the balance sheet of the ending inventory of finished goods under variable costing is shown below:
But before that first we have to determine the unit cost which is
Unit fixed manufacturing overhead
= $96,320 ÷ 6,020
= $16
Now the difference is
= Unit fixed manufacturing overhead × Change in inventory in units
= $16 × (6,020 units - 5,920 units)
= $1,600 less than under absorption costing.
Answer:
$28 million
Explanation:
The amount that Ford Motor Company owes in taxes next year without the launch of the new SUV is = $80 million * 35% = $28 million. Because the SUV have not been launched, the operating loss associated with heavy advertising will not be considered.
