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

Business assignmentthe comany i have choosen is upsresearch

Business Assignment The comany i have choosen is UPS. Research a company that interests you from the Fortune 500. (A list will be provided). Analyze what they do. What business are they in? What industry? How have they b ...

Part 1problem 2aagrichem industries manufactures fertilizer

Part 1 PROBLEM 2A AgriChem Industries manufactures fertilizer concentrate and uses cost standards. The fertilizer is produced in 500-pound batches; the normal level of production is 250 batches of fertilizer per month. T ...

Review the provisions of the sarbanes-oxley act of 2002 to

Review the provisions of the Sarbanes-Oxley Act of 2002 to address the accounting scandals in the late 1990s and early 2000s (Enron, WorldCom, etc.). Identify the provisions that you believe made the most significant imp ...

To write discussion post to given answerrequirementsdo not

To write discussion post to given answer Requirements: Do not use any direct quotes and/or cut and pasted information (i.e. your discussion is to be 100% your thoughts, ideals and insights). You can agree or disagree wit ...

Writing assignment cash and receivablesassignment

Writing Assignment: Cash and Receivables Assignment Goals: - Obtain research experience in the Accounting Standards Codification - Obtain experience using SEC filings and the SEC website - Practice writing concise accoun ...

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 ...

Garner company began operations on january 1 2010 and uses

Garner Company began operations on January 1, 2010, and uses the average cost method of pricing inventory. Management is contemplating a change in inventory methods for 2013. The following information is available for th ...

Accounting information systems1 you have been asked by the

Accounting Information Systems 1. You have been asked by the CFO of the company where you work or previously worked to evaluate the use of a professional service organization for processing the company's payroll. Identif ...

Accounting information systemsfor this assignment research

Accounting Information Systems For this assignment, research the Internet or Strayer databases to locate a firm that was involved in a fraud and / or embezzlement case. Explain how the firm's accounting information syste ...

To understand the accounting equation and its

To understand the accounting equation and its elements QUESTION Mr. "A" starts a new business. Before to start the business operation, he has purchased vehicle Rs. 1,500,000, office premises Rs. 3,000,000, stock of goods ...

  • 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