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Cornerstones of Managerial Accounting 6th Edition by Maryanne Mowen,Don Hansen ,Dan Heitger
Edition 6ISBN: 978-1305103962Cornerstones of Managerial Accounting 6th Edition by Maryanne Mowen,Don Hansen ,Dan Heitger
Edition 6ISBN: 978-1305103962 Exercise 61
Cost-Volume-Profit Equation, Basic Concepts, Solving for Unknowns
Legrand Company produces hand cream in plastic jars. Each jar sells for $3.40. The variable cost for each jar (materials, labor, and overhead) totals $2.55. The total fixed cost is $58,140. During the most recent year, 81,600 jars were sold.
Required:
1. What is the break-even point in units for Legrand? What is the margin of safety in units for the most recent year?
2. Prepare an income statement for Legrand's most recent year.
3. How many units must be sold for Legrand to earn a profit of $25,500?
4. What is the level of sales dollars needed for Legrand to earn operating income of 10% of sales?
Legrand Company produces hand cream in plastic jars. Each jar sells for $3.40. The variable cost for each jar (materials, labor, and overhead) totals $2.55. The total fixed cost is $58,140. During the most recent year, 81,600 jars were sold.
Required:
1. What is the break-even point in units for Legrand? What is the margin of safety in units for the most recent year?
2. Prepare an income statement for Legrand's most recent year.
3. How many units must be sold for Legrand to earn a profit of $25,500?
4. What is the level of sales dollars needed for Legrand to earn operating income of 10% of sales?
Explanation
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Cornerstones of Managerial Accounting 6th Edition by Maryanne Mowen,Don Hansen ,Dan Heitger
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