1. Break-Even Sales and A chart used to assist management in understanding the relationships among costs, expenses, sales, and operating profit or loss.Cost-Volume-Profit ChartLast year, Gelbin Inc. had sales of $273,000, based on a unit selling price of $130. The Costs that vary in total dollar amount as the level of activity changes.variable cost per unit was $100, and Costs that tend to remain the same in amount, regardless of variations in the level of activity.fixed costs were $43,800. The maximum sales within Gelbin’s The range of activity over which changes in cost are of interest to management.relevant range are 2,600 units. Gelbin is considering a proposal to spend an additional $12,000 on billboard advertising during the current year in an attempt to increase sales and utilize unused capacity.Required:1.Construct a cost-volume-profit chart on your own paper, indicating the break-even sales for last year. In your computations, do not round the contribution margin percentage.Break-even sales (dollars)$19200· $19200· $34200· $189800· $241800Break-even sales (units)· 1460· 1860· 7200· 222002.Using the cost-volume-profit chart prepared in part (1), determine (a) the income from operations for last year and (b) the maximum income from operations that could have been realized during the year. In your computations, do not round the contribution margin percentage.Income from operations· $19200· $34200· $189800· $241800Maximum income from operations· $19200· $34200· $189800· $2418003.Construct a cost-volume-profit chart (on your own paper) indicating the break-even sales for the current year, assuming that a noncancelable contract is signed for the additional billboard advertising. No changes are expected in the unit selling price or other costs. In your computations, do not round the contribution margin percentage.Dollars· $19200· $34200· $189800· $241800Units· 19200· 1860· 7200· 222004.Using the cost-volume-profit chart prepared in part (3), determine (a) the income from operations if sales total 2,100 units and (b) the maximum income from operations that could be realized during the year. In your computations, do not round the contribution margin percentage.Income from operations at 2,100 units· $1460· $1860· $7200· $22200Maximum income from operations· $1460· $1860· $7200· $22200Note- the answers are multiple choice, so I just need to know which are the correct figures. Thanks
Recent Comments