179.Clockworks Co. reports the following data for the current year:
Units Sold1,200
Unit Sales Price$30
Unit Variable Cost$10
Total Fixed Cost$18,000
Required:
(a) Calculate Clockworks' pretax income.
(b) Calculate Clockworks' degree of operating leverage.
180.Fielder Productions reports the following information:
Total Contribution Margin$32,000
Total Fixed Costs$28,000
Required:
(a) Calculate Fielder's degree of operating leverage (DOL).
(b) Fielder Productions forecasts a 6% increase in sales. What is the expected effect in percent on pretax income?
181.Craft Company and Jarmer Company each have sales of $200,000 and costs of $140,000. Craft Company's costs consist of $40,000 fixed and $100,000 variable, while Jarmer Company's costs consist of $100,000 fixed and $40,000 variable. Which company will suffer the greatest decline in profits if sales volume declines by 15%? Prepare income statements and compute degree of operating leverage to assess.
182.Wolowitz Company's product has a contribution margin per unit of $62.50 and a contribution margin ratio of 25%. What is the per unit selling price of the product?
183.A company sells a single product that has a contribution margin ratio of 28%. If the company's total fixed costs are $84,000, what is the break-even point in dollar sales?
184.Elk Co. manufactures a product that sells for $12 per unit. Total fixed costs are $96,000 and variable costs are $7 per unit. Elk can buy a newer production machine that will increase total fixed costs by $22,800 but variable costs will be decreased by $0.40 per unit. What effect would the purchase of the new machine have on Elk's break-even point in units?
185.Expanse Co. is considering the production and sale of a new product line with the following sales and cost data: unit sales price $125; unit variable costs $50; and total fixed costs of $150,000. Calculate the break-even point in units and in dollar sales.
186.Seaquest Company's contribution margin income statement is presented below. Sales for the current period consisted of 5,000 units. Determine the company's break-even point in dollars.
Seaquest Company
Contribution Margin Income Statement
Sales$125,000
Variable costs 90,000
Contribution margin35,000
Fixed costs 28,000
Net income $7,000