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Cost-Volume-Profit;volume Defined in Sales Dollars

Question 113

Essay

Cost-volume-profit;volume defined in sales dollars.An excerpt from the income statement of the Kingston Company follows.Fixed costs in Year 1 are $325,000.
Kingston Company
Income Statement
Year ended December 31,year 1
Cost-volume-profit;volume defined in sales dollars.An excerpt from the income statement of the Kingston Company follows.Fixed costs in Year 1 are $325,000. Kingston Company Income Statement Year ended December 31,year 1 Required: a.What percentage of sales revenue is variable cost? b.What is the break-even point in sales dollars for Kingston Company? c.If sales revenue falls to $2,900,000,what will be the estimated amount of profit? d.What amount of sales dollars produces a profit of $1,000,000? (Kingston Company;cost-volume-profit;volume defined in sales dollars. )
Required:
a.What percentage of sales revenue is variable cost?
b.What is the break-even point in sales dollars for Kingston Company?
c.If sales revenue falls to $2,900,000,what will be the estimated amount of profit?
d.What amount of sales dollars produces a profit of $1,000,000?
(Kingston Company;cost-volume-profit;volume defined in sales dollars. )

Correct Answer:

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a.$1,925,000 - $325,000 = $1,600,000
$1,...

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