Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

Below find production and sales information for Herrestad Company. We will use this same company for all the SLPs in this course.

Product information

Beginning inventory
0

Units produced
10,000

quot; valign="bottom">
Units sold
8,000

Selling price per unit
$300

Variable costs per unit

Direct material
120

Direct labor
60

Variable overhead
40

Variable selling and administrative
10

Fixed costs

Fixed manufacturing overhead
250,000

Fixed selling and administrative
100,000

Herrestad Company

Absorption Income Statement

For the period ending Dec. 31, 2011

Sales
$2,400,000

Cost of goods sold
1,960,000

Gross profit (margin)
$440,000

Selling and administrative expenses
180,000

Net income
$260,000

Prepare a contribution margin (behavioral, variable) income statement for Herrestad Company. Prepare a second version assuming the selling price per unit increases to $320 per unit.

Use the original information to:

Determine the number of units the company must sell to break even for the year?
Compute break even assuming direct materials cost increase from $120 to $140, but all information remains the same.

 

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M928620

Have any Question? 


Related Questions in Basic Finance

Conduct a similar analysis on financial leverage for the

Conduct a similar analysis on financial leverage for the same two companies in given Problem. Problem:- Compare the operating leverage of Toyota Motor Corp. (ticker: J:TYMO) with that of Nissan Motor Company Limited (J:N ...

What are the objectives of the cash management functionwhat

What are the objectives of the cash management function? What is cash management essentially concerned with? How can a centralized cash management system be beneficial to the MNC?

A news story reported that the former ceo of homebuilder kb

A news story reported that the former CEO of homebuilder KB Home was convicted "of four felony counts in a stock option backdating scam." The article goes on to note: A stock option allows an employee to purchase a compa ...

1 discuss the pros and cons of using nonhuman animals in

1. Discuss the pros and cons of using nonhuman animals in behavioral research. 2. What are some examples of scientific misconduct?

Assume that you have an opportunity to visit a civilization

Assume that you have an opportunity to visit a civilization in outer space. Its society is at roughly the same stage of development as U.S. society is now. Its economic system is virtually identical to that of the United ...

1 what are order effects and how does counterbalancing help

1. What are order effects, and how does counterbalancing help us deal with them? 2. Distinguish between treatment, confound, and error variance. 3. Which is worse--confound variance or error variance? Why?

We have seen that federal reserve chairman ben bernanke has

We have seen that Federal Reserve Chairman Ben Bernanke has argued that low interest rates in the United States during the mid-2000s were due to a global savings glut rather than to Federal Reserve policy. In an intervie ...

1 why must researchers use reliable measures2 why is it

1. Why must researchers use reliable measures? 2. Why is it virtually impossible to eliminate all measurement error from the measures we use in research? 3. What is the relationship between the reliability of a measure a ...

1 what is the basic objective in a logistics design and

1. What is the basic objective in a logistics design and analysis study? Is it normally a one-time activity? 2. What is sensitivity analysis, and what is its role in systems design and analysis? 3. Why is it important to ...

Suppose the ceo of your company owns 500000 shares of stock

Suppose the CEO of your company owns 500,000 shares of stock in the company and is granted 10,000 non-transferable European options as a bonus. The expiration date of the options is two years, the strike price is $100 an ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro