Summary ACCT 212 Chapter 5 Homework Liberty University answers complete solutions (latest 2022/2023) 1. Blanchard Company manufactures a single product that sells for $180 per unit and whose total variable costs are $135 per unit. The company’s annual fixed cost

ACCT 212 Chapter 5 Homework Liberty University answers complete solutions (latest 2022/2023) 1. Blanchard Company manufactures a single product that sells for $180 per unit and whose total variable costs are $135 per unit. The company’s annual fixed costs are $562,500. 2. Blanchard Company manufactures a single product that sells for $180 per unit and whose total variable costs are $135 per unit. The company’s annual fixed costs are $562,500. (1) Prepare a contribution margin income statement for Blanchard Company at the break-even point. (2) Assume the company’s fixed costs increase by $135,000. What amount of sales (in dollars) is needed to break even? 3. Blanchard Company manufactures a single product that sells for $180 per unit and whose total variable costs are $135 per unit. The company’s annual fixed costs are $562,500. Management targets an annual pretax income of $1,012,500. 4. Bloom Company management predicts that it will incur fixed costs of $160,000 and earn pretax income of $164,000 in the next period. Its expected contribution margin ratio is 25%. 1. Compute the amount of total dollar sales. 2. Compute the amount of total variable costs. [The following information applies to the questions displayed below.] Praveen Co. manufactures and markets a number of rope products. Management is considering the future of Product XT, a special rope for hang gliding, that has not been as profitable as planned. Since Product XT is manufactured and marketed independently of the other products, its total costs can be precisely measured. Next year’s plans call for a $200 selling price per 100 yards of XT rope. Its fixed costs for the year are expected to be $270,000, up to a maximum capacity of 700,000 yards of rope. Forecasted variable costs are $140 per 100 yards of XT rope. 5. 1. Estimate Product XT’s break-even point in terms of sales units and sales dollars. (1 unit = 100 yards)(Do not round intermediate calculations.) 6. 3. Prepare a contribution margin income statement showing sales, variable costs, and fixed costs for Product XT at the break-even point. [The following information applies to the questions displayed below.] This year Burchard Company sold 40,000 units of its only product for $25 per unit. Manufacturing and selling the product required $200,000 of fixed manufacturing costs and $325,000 of fixed selling and administrative costs. Its per unit variable costs follow. Material $ 8.00 Direct labor (paid on the basis of completed units) 5.00 Variable overhead costs 1.00 Variable selling and administrative costs 0.50 ________________________________________ Next year the company will use new material, which will reduce material costs by 50% and direct labor costs by 60% and will not affect product quality or marketability. Management is considering an increase in the unit selling price to reduce the number of units sold because the factory’s output is nearing its annual output capacity of 45,000 units. Two plans are being considered. Under plan 1, the company will keep the selling price at the current level and sell the same volume as last year. This plan will increase income because of the reduced costs from using the new material. Under plan 2, the company will increase the selling price by 20%. This plan will decrease unit sales volume by 10%. Under both plans 1 and 2, the total fixed costs and the variable costs per unit for overhead and for selling and administrative costs will remain the same. 7. Required: 1. Compute the break-even point in dollar sales for both (a) plan 1 and (b) plan 2. (Round "per unit answers" to 2 decimal places.) 8. 2. Prepare a forecasted contribution margin income statement with two columns showing the expected results of plan 1 and plan 2. The statements should report sales, total variable costs, contribution margin, total fixed costs, income before taxes, income taxes (30% rate), and net income. 9. Handy Home sells windows and doors in the ratio of 8:2 (windows:doors). The selling price of each window is $200 and of each door is $500. The variable cost of a window is $125 and of a door is $350. Fixed costs are $900,000.