Respuesta :
Answer: Please see explanation column for answer
Explanation:
Recasting the income statement to emphasize contribution margin.
Juicy Beauty Operating Income Statement, June 2017
Units sold 20,000
Revenues $200,000
Variable costs(subtract):
Variable manufacturing costs $110,000
Variable marketing costs $10,000
Total variable costs $120,000
Contribution margin $80,000
Fixed costs
fixed manufacturing costs 40,000
Fixed marketing and administrative costs 20,000
Total fixed cost $60,000
Operating income $20,000
Working for income statement above =
Contribution margin = Revenue -Total variable cost =$200,000- ($110,000 + $10,000) - $80,000
Operating income= Contribution margin - Total fixed cost = $80,000 - $($40,000 +$20,000) -=$20,000
2 The contribution margin percentage and breakeven point in units and revenues for June 2017.
Contribution margin percentage = ,Contribution margin/ Revenue x 100%
= $80,000/ $200,000 x 100= 40 %
Contribution margin per unit = ,Contribution margin/ units sold
80,000 / 20,000= $4 per unit
Break even point units = Total fixed cost/ ,Contribution margin per unit
= $60,000/ $4= 15,000units
Break even revenue=
we first calculate the selling price = Revenue / units sold = $200,000/ 20,000 =$10
Break even revenue=Break even units x per unit sold = $15,000 x $10 = $150,000.
3. Margin of safety = units sold - break even point unit
20,000 - 15,000 =5000 units
4. If the sales is 16,000 and tax is 30% , Net income is
Units sold 16,000
Revenue $160,000
Contribution margin $64,000
Total fixed cost - $60,000
Operation income $4,000
tax at 30 % - $ 1200
Net income $2,800
working
Revenue = units sold x sale per unit = 16,000 x $10 = $160,000
Contribution margin = Revenue x contribution margin percentage = $160,000 x 40% = $64,000
Operation income = contribution margin - fixed costs= $64,000 - $60,000 = $4000
Tax = 30% of 4000 = $1200
Net income = $4000 - $1200 = $2,800
Answer:
Juicy Beauty and George Lopez
Juicy Beauty's Cost Structure:
1. Juicy Beauty's Contribution Income Statement, June 2017
Units sold 20,000
Revenues $200,000
Variable Cost:
Variable manufacturing costs $110,000
Variable marketing costs $10,000
Total Variable Cost 120,000
Contribution $80,000
Fixed costs:
Fixed manufacturing costs 40,000
Fixed marketing & admin costs 20,000
Total Fixed costs 60,000
Operating income $20,000
2a) Contribution Margin Percentage = $80,000/$200,000 x 100 = 40%
2b) Breakeven point in units and revenue:
To breakeven, total costs = total revenue
Breakeven point in units = Fixed Cost/Contribution per unit = $60,000/$4 = 15,000 units
Breakeven point in revenue = Fixed Cost/Contribution margin ratio = $60,000/40% = $150,000
3. Margin of Safety = (Sales - Break-even revenue)/Sales x 100 = ($200,000 - $150,000)/$200,000 x 100 = $50,000/$200,000 x 100 = 25%
4. Calculation of Net Income with sales of 16,000 units and Tax of 30%:
Sales $160,000
Variable cost 96,000
Contribution $64,000
Fixed Cost 60,000
Pretax Income $4,000
Tax 1,200
Net Income $2,800
Explanation:
a) Juicy Beauty Operating Income Statement, June 2017
Units sold 20,000
Revenues $200,000
Cost of goods sold:
Variable manufacturing costs $110,000
Fixed manufacturing costs 40,000
Total 150,000
Gross margin $50,000
Operating costs:
Variable marketing costs $10,000
Fixed marketing & admin costs 20,000
Total operating costs 30,000
Operating income $20,000
b) Financial accounting prepares the income statement differently from the way that cost and management accounting prepare the income statement. Financial accounting emphasizes gross profit - using absorption costing technique. Management accounting focuses on contribution using variable costing. In variable costing, costs are identified according to their behaviors.
c) The breakeven point is the level of production at which the costs of production equal the revenues for a product. This means that there is no profit.
d) The contribution margin ratio is the ratio of contribution margin to the sales. It is expressed in percentage.
e) The margin of safety is the ratio of the difference between sales revenue and breakeven revenue over the sales revenue. It is expressed in percentage.
