Blike Co. is a convenience store that is currently open only Monday through Saturday. It considers opening every Sunday. The annual incremental fixed costs of Sunday openings are estimated at P52,000. The company’s contribution margin ratio is 20%. It estimates that 60% of its Sunday sales to customers would be made on other days if the store were not open during Sundays. How much additional weekly sales would be necessary for Blike Co. to attain an increase of P2,500 in weekly operating profit by opening every Sunday?

Blike Co. is a convenience store that is currently open only Monday through Saturday. It considers opening every Sunday. The annual incremental fixed costs of Sunday openings are estimated at P52,000. The company’s contribution margin ratio is 20%. It estimates that 60% of its Sunday sales to customers would be made on other days if the store were not open during Sundays. How much additional weekly sales would be necessary for Blike Co. to attain an increase of P2,500 in weekly operating profit by opening every Sunday?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 6EB: Kerr Manufacturing sells a single product with a selling price of $600 with variable costs per unit...

See similar textbooks

Similar questions

Maple Enterprises sells a single product with a selling price of $75 and variable costs per unit of $30. The companys monthly fixed expenses are $22,500. What is the companys break-even point in units? What is the companys break-even point in dollars? Construct a contribution margin income statement for the month of September when they will sell 900 units. How many units will Maple need to sell in order to reach a target profit of $45,000? What dollar sales will Maple need in order to reach a target profit of $45,000? Construct a contribution margin income statement for Maple that reflects $150,000 in sales volume.
Marlin Motors sells a single product with a selling price of $400 with variable costs per unit of $160. The companys monthly fixed expenses are $36,000. What is the companys break-even point in units? What is the companys break-even point in dollars? Prepare a contribution margin income statement for the month of November when they will sell 130 units. How many units will Marlin need to sell in order to realize a target profit of $48,000? What dollar sales will Marlin need to generate in order to realize a target profit of $48.000? Construct a contribution margin income statement for the month of February that reflects $200,000 in sales revenue for Marlin Motors.
Kerr Manufacturing sells a single product with a selling price of $600 with variable costs per unit of $360. The companys monthly fixed expenses are $72,000. What is the companys break-even point in units? What is the companys break-even point in dollars? Prepare a contribution margin income statement for the month of January when they will sell 500 units. How many units will Kerr need to sell in order to realize a target profit of $120,000? What dollar sales will Kerr need to generate in order to realize a target profit of $120,000? Construct a contribution margin income statement for the month of June that reflects $600,000 in sales revenue for Kerr Manufacturing.
Variety Artisans has a bottleneck in their production that occurs within the engraving department. Arjun Naipul, the COO, is considering hiring an extra worker, whose salary will be $45,000 per year, to solve the problem. With this extra worker, the company could produce and sell 3,500 more units per year. Currently, the selling price per unit is $18 and the cost per unit is $5.85. Using the information provided, calculate the annual financial impact of hiring the extra worker.
Artisan Metalworks has a bottleneck in their production that occurs within the engraving department. Jamal Moore, the COO, is considering hiring an extra worker, whose salary will be $55,000 per year, to solve the problem. With this extra worker, the company could produce and sell 3,000 more units per year. Currently, the selling price per unit is $25 and the cost per unit is $7.85. Using the information provided, calculate the annual financial impact of hiring the extra worker.
Dimitri Designs has capacity to produce 30,000 desk chairs per year and is currently selling all 30,000 for $240 each. Country Enterprises has approached Dimitri to buy 800 chairs for $210 each. Dimitris normal variable cost is $165 per chair, including $50 per unit in direct labor per chair. Dimitri can produce the special order on an overtime shift, which means that direct labor would be paid overtime at 150% of the normal pay rate. The annual fixed costs will be unaffected by the special order and the contract will not disrupt any of Dimitris other operations. What will be the impact on profits of accepting the order?
National Co. is convenience store that is currently open only Monday to Saturday. National is considering opening on Sundays. The annual incremental costs of Sunday openings are estimated at P31,200. National’s contribution margin ratio is 25%. National estimates that 75% of its Sunday sales to customers would be made on other days if the store were not open on Sundays. The one-day volume of Sunday sales that would be necessary for National Co. to attain the same weekly operating as the current six-day week is
A company sells a toy for $12.80 each. The material, labour, and marketing costs add up to $1.00 per toy. The company also bears fixed costs of $10,100 per month related to this particular product. If the company produces and sells 850 toys each month, what is its monthly net income? Monthly net income = $ there is a loss.) (Enter your answer as negative if
The Widget Co. currently sells 800 widgets per week for a price of $7.00 each. Their market research indicates that for each $0.50 increase in price they will sell 25 fewer widgets per week. What price should they charge to maximize sales income?
Cruse Cleaning offers residential and small office cleaning services. An average cleaning service has the following price and costs. Sales price $ 128.00 per service Variable costs 90.00 per service Fixed costs 124,982 per year Cruse Cleaning is subject to an income tax rate of 22 percent. Required: How many cleaning services must Cruse Cleaning sell in a year to break even? How many cleaning services must Cruse Cleaning sell in a year to earn an annual operating profit of $34,086 after taxes?
Assume that a merchandiser purchases a product from a supplier for $3.00 per unit and then sells it to customers for $5.00 per unit. Ordinarily, the company sell 30,000 units per year; however, it is considering lowering its price to $4.50 per unit. At the lower price, the company expects to sell 49,250 units per year. What total contribution margin will the company earn if it sells 49,250 units at a price of $4.50 per unit? Multiple Choice $69,400 $73,875 $64,025 $83,725
Golden Gate Novelties (GGN) sells souvenir key chains at the local airport. GGN charges $12.00 per chain. The variable cost for a chain, including the wholesale cost of the chain, packaging, the commission paid to the airport operator, and so on, is $10.40. The annual fixed cost for GGN is $15,000. Required: a. How many cases must Golden Gate Novelties sell every year to break even? Note: Do not round intermediate calculations. b. The owner of GGN believes that the company can sell 12,500 chains a year. What is the margin of safety in terms of the number of chains? a. Break-even point b. Margin of safety chains chains