Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Accounting Basics Expert

Q1) Wilson is wholesale distributor of widgets. Company services groceries, convenience stores, and superstores like Wal-Mart. Small but gradual growth has been achieved over past few years where as widget prices have been increasing. Company is formulating its plans for coming fiscal year. Listed below are data used to project the present years after tax net income of $264,960.

Average selling price: $9.60 per case

Average variable costs:

Widget production: $4.80 per case

Selling expense: $.96 per case

Total: $5.76 per case

Annual fixed costs: $1,056,000

Expected annual sales volume: 390,000 cases

Tax rate: 40%

Manufacturers of widgets have proclaimed that they will rise prices of their products on average 15% in coming year due to increases in raw materials and labor costs. All other variable costs change 15% as well. Wilson expects all other costs will stay at same rates or levels as the present year. These changes haven't been entered into the information presented above.

Answer the following:

a) Compute Wilson's break-even point in cases of widgets for present year?

b) What selling price per case should Wilson charge to cover 15% increase in variable production costs (the 15% increase comprises all variable costs associated with this problem) and still sustain present contribution margin percentage?

c) Determine the number of units which Wilson should achieve in coming year to sustain the same net income after taxes as projected for present year if selling price of widgets remains at $9.60 per case and variable production costs of widgets increase 15%?

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M918161

Have any Question? 


Related Questions in Accounting Basics

Assignemntselect a research issue problem or opportunity

Assignemnt Select a research issue, problem, or opportunity that could benefit from hypothesis testing. It may be an issue related to your work or it may a more global type of problem. Develop a research hypothesis that ...

1you have been hired by the cfo of strayer university to

1.You have been hired by the CFO of Strayer University to develop a plan to protect its accounting and financial systems at a reasonable cost. Suggest a high-level plan for the CFO. Provide support for your suggestion. B ...

Part a -exercise 1 - california graphics is a us

Part A - Exercise 1 - California Graphics is a U.S. corporation with $200 million of U.S.-source income and $10 million of foreign-source income. In addition, California Graphics has three-quarters ownership of a Canadia ...

Discussion questions 1 and 2dq 1 accounting equationas you

Discussion Questions 1 and 2 DQ #1: Accounting Equation As you have learned in this week's readings, the Accounting Equation is Assets = Liabilities + Owners' Equity. Is the accounting equation true in all instances? Pro ...

Accounting assignmentyour response should be 2-3 pages

Accounting Assignment YOUR RESPONSE SHOULD BE 2-3 PAGES COMPRISING BOTH RESEARCH CASES. Professional Research 1 Your client took accounting a number of years ago and was unaware of comprehensive income reporting. He is n ...

Accounting for governmenttrue or false1 a fund in itself is

ACCOUNTING FOR GOVERNMENT True or False 1. A fund in itself is a separate legal entity that is established to comply with laws that require that certain transactions be segregated and accounted for as a separate "fund." ...

Westerville company reported the following results from

Westerville Company reported the following results from last year % 2013 operations: Sales $ 1,000,000 Variable expenses 300,000 -------------------------------------- Contribution margin 700,000 Fixed expenses 500,000 - ...

1 identify an industry to focus on it is suggested that you

1) Identify an industry to focus on (It is suggested that you use an industry that is expanding rather than consolidating, but the choice is yours to make). Explain why you chose this industry and its environment. 2) Ide ...

Question 1under the allowance method bad debt expense is

Question 1 Under the allowance method, Bad Debt Expense is recorded A. as an estimate. B. when an individual account is written off. C. several times during the year as needed. D. None of the above Question 2 Which amoun ...

Kent cpa is a staff auditor participating in the audit

Kent, CPA is a staff auditor participating in the audit engagement of Fort, Inc. Based upon each of the circumstances below, indicate whether or not Kent's actions impair his independence. Explain your response for each ...

  • 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

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

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen