Skelly Company
Skelly Company’s controller prepared the following budgeted income statement for the coming
year:
Sales $ 315,000
Less: Variable expenses $ 126,000
Contribution margin $ 189,000
Less: Fixed expenses $ 63,000
Profit before taxes $ 126,000
Less: Taxes $ 37,800
Profit after taxes $ 88,200
1. What is Skelly’s variable cost ratio? What is its contribution margin ratio? 3
Variable Cost Ratio = $126.000/$315.000
0.40
Contribution Margin = $189.000/$315.000
0.60
2 Suppose Skelly’s actual revenues are $46,000 more than budgeted. By howmuch
will before-tax profits increase? Give the answer without preparing a new income 4
statement.
Suppose Skelly’s actual revenues $ 46,000
$46.000 x 0,60 = $ 27,600
Skelly Company
How much sales revenue must Skelly earn to break even? 5 How much sales revenue must Skelly ge
What is the expected margin of safety? statement to verify the accuracy of your
Break-even revenue = $63.000/0,60 after-tax profit
$ 105,000
Margin of safety = $315.000 -$105.000 Tax Rate =
$ 210,000
How much sales revenue must Skelly generate to earn a Befo
before-tax profit of $90,000?
before-tax profit $ 90,000
Revenue = ($63.000 + $90.000)/0,60
$ 255,000
How much sales revenue must Skelly generate to earn an after-tax profit of $56,000? Prepare a contribution income
statement to verify the accuracy of your answer.
$ 56,000
$37.000/$126.000
$ 0.30
Before-tax income = $56.000/(1-0,30)
$ 80,000
revenue = ($63.000 + $80.000)/0,60
$ 238,333.33
Sales $ 238,333
dikurangi
Variable Expenses ($238.333 x 0,40) $ 95,333
Contribution Margin $ 143,000
dikurangi
Fixed Expenses $ 63,000
Income Before Income Taxes $ 80,000
Income Taxes ($80 x 0,30) $ 24,000
$ 56,000
come
Graham Company
Graham Company produces a variety of chemicals. One division makes reagents for
laboratories. The division’s projected income statement for the coming year is as follows:
Sales (110,000 units @ $25) $ 2,750,000 110000 unit
Less: Variable expenses $ 1,925,000 $ 25 @unit
Contribution margin $ 825,000
Less: Fixed expenses $ 495,000
Operating income $ 330,000
1 Compute the contribution margin per unit, and calculate the break-even point in 4 Refer to the original
units (round to the nearest unit). Calculate the contribution margin ratio and the profit of $360,000?
break-even sales revenue.
Unit contribution margin = $825,000/110,000
$ 7.50
Break-even point = $495,000/$7.50
66000 Unit
CM ratio = $7.50/$25
0.30
Break-even point = $495,000/0.30
$ 1,650,000 5
$25 × 66,000
$ 1,650,000
The divisional manager has decided to increase the advertising budget by
$40,000. This will increase sales revenues by $400,000. By how much will operating
income increase or decrease as a result of this action?
increase sales revenues $ 400,000 6
Increased advertising expense $ 40,000
2 Increased CM ($400,000 × 0.30) $ 120,000.00
Dikurangi
Increased advertising expense $ 40,000
Increased operating income $ 80,000
3. Suppose sales revenues exceed the estimated amount on the income statement by
$315,000. Without preparing a new income statement, by how much are profits
underestimated?
income statement $ 315,000
profits underestimated = $315,000 × 0.30
$ 94,500
ham Company
Refer to the original data. How many units must be sold to earn an after-tax
profit of $360,000? Assume a tax rate of 40 percent.
after-tax profi $ 360,000
tax rate 40%
Before-tax income = $360,000/(1 – 0.40)
$ 600,000
Units = ($495,000 + $600,000)/$7.50
$ 146,000
Compute the margin of safety based on the original income statement.
Margin of safety = $2,750,000 – $1,650,000
$ 1,100,000
110,000 units – 66,000 units
44000 Unit
Compute the operating leverage based on the original income statement. If sales
revenues are 20 percent greater than expected, what is the percentage increase in
profits?
sales revenues 20%
operating leverage = $825,000/$330,000
2.5
profit increase = 20% × 2.5
50%
Victoria Company
Victoria Company produces a single product. Last year’s income statement is as follows:
29000 Unit
$ 42 @Unit
Sales (29,000 units @ $42) $ 1,218,000
Less: Variable costs $ 812,000
Contribution margin $ 406,000
Less: Fixed costs $ 300,000
Operating income $ 106,000
1 Compute the break-even point in units and sales dollars. 3 Suppose that Victoria Company is consider
$250,000 per year but will lower variable c
budgeted income statement assuming tha
units and sales dollars, assuming that the i
$406,000/29,000 = $ 14
Break-even units = $300,000/$14
$ 21,429
$1,218,000/29,000 = $ 42
Break-even in dollars = 21,429 × $42
$ 900,000
= $300,000/(1/3)
$ 900,000
2 What was the margin of safety for Victoria Company last year?
Margin of safety = $1,218,000 – $900,000
$ 318,000
Victoria Company
tement is as follows:
Suppose that Victoria Company is considering an investment in new technology that will increase fixed costs by
$250,000 per year but will lower variable costs to 45 percent of sales. Units sold will remain unchanged. Prepare a
budgeted income statement assuming that Victoria makes this investment. What is the new break-even point in
units and sales dollars, assuming that the investment is made?
increase fixed costs $ 250,000
variable costs 45%
Sales $ 1,218,000
Variable costs (0.45 × $1,218,000) $ 548,100
Contribution margin $ 669,900
Fixed costs $ 550,000
Operating income $ 119,900
$669,900/29,000 = $ 23.10
$669,900/$1,218,000 = 55%
Break-even in units = $550,000/$23.10
$ 23,810
Break-even in sales dollars = $550,000/0.55
$ 1,000,000
ase fixed costs by
nchanged. Prepare a
reak-even point in
Chesbrough, Inc., makes many of the components of its main product in-
house. Recently, Berham Electronics offered to supply one component,
K-25, at a price of $6.50 each. Chesbrough uses 20,000 units of
component K-25 each year. The absorption cost per unit of this
component is as follows:
Direct materials $ 2.95
Direct labor $ 0.40
Variable overhead $ 1.80
Fixed overhead $ 4.00
Total $ 9.15
1 What are the alternatives facing Chesbrough, Inc., with respect to
production of component K-25?
Dua alternatif adalah membuat komponen di rumah atau membelinya
dari pemasok luar
2 List the relevant costs for each alternative. Suppose that Chesbrough,
Inc., purchases K-25 from Berham Electronics. By how much will
operating income increase or decrease?
alternatives perbedaan
internal eksternal biaya membuat internal
Material langsung $ 2.95 - $ 2.95
Pekerja langsung $ 0.40 - $ 0.40
Overhead variable $ 1.80 - $ 1.80
Biaya pembelian - $ 6.50 $ (6.50)
total biaya relevant $ 5.15 $ 6.50 $ (1.35)
Chesbrough sebaiknya memilih untuk membuat component secara internal karena
operating income akan berkurang sebesar 27000 (1,35*20000) jika membeli dari
Berham Eletronics
Garringer Company makes two products, regulars and seasonals. Information on
costs associated with each product line is as follows:
Regulars Seasonals
Sales revenue $ 135,000 $ 15,000
Less: Variable expenses $ 50,000 $ 8,600
Contribution margin $ 85,000 $ 6,400
Less:
Direct fixed expenses $ 3,000 $ 1,200
Common fixed expenses $ 54,000 $ 6,000
Operating income $ 28,000 $ (800)
1. Develop a segmented income statement, by product and in total for Garringer
Company. Be sure to show the segment margin for each product.
regulars seasonals
Pendapatan penjualan $ 135,000 $ 15,000
(-) Beban variable $ 50,000 $ 8,600
Margin ontribusi $ 85,000 $ 6,400
(-) Beban tetap langsung $ 3,000 $ 1,200
Margin segment $ 82,000 $ 5,200
(-) Beban common tetap
Operating income
2. By how much would operating income increase or decrease if the seasonals were
dropped?
Denga menghentikan jalur seasonal maka akan mengurangi operating income
sebesar $5200
on
total
$ 150,000
$ 58,600
$ 91,400
$ 4,200
$ 87,200
$ 60,000
$ 27,200
were
Steve Murningham, manager of an electronics division, was considering an offer by Pat Sellers, manager of a sister division
and had just been given an opportunity to produce 8,000 units of one of its products for a customer in a market not norma
that uses an electrical component produced by Steve’s division. Each unit that Pat’s department produces requires two of
customer is willing to pay is well below the price usually charged; to make a reasonable profit on the order, Pat needs a pri
offered to pay full manufacturing cost for the parts. So that Steve would know that everything was aboveboard, Pat had su
information concerning the special order, excluding the cost of the electrical component:
8000 Unit
Selling price $ 32
Less costs:
Direct materials $ (17)
Direct labor $ (7)
Variable overhead $ (2)
Fixed overhead $ (3)
Operating profit $ 3
1 Should Steve accept the order at a selling price of $1.85 per unit? By how much will his division’s profits be changed if
the order is accepted? By how much will the profits of Pat’s division change if Steve agrees to supply the part at full
cost?
Selling price $ 1.85 @Unit
Steve should consider selling the part for $1.85 because his division’s profits
would increase by $12,800:
Accept Reject
Revenue (2 × $1.85 × 8,000) $ 29,600 $ -
Variable Expenses $ 16,800 $ -
Tota $ 12,800 $ -
Pat’s divisional profits would increase by $18,400:
Accept Reject
Revenue ($32 × 8,000) $ 256,000 $ -
Variable Expenses
Direct materials ($17 × 8,000) $ (136,000) $ -
Direct labor ($7 × 8,000) $ (56,000) $ -
Variable overhead ($2 × 8,000) $ (16,000) $ -
Component (2 × $1.85 × 8,000) $ (29,600) $ -
Total relevant benefits $ 18,400 $ -
2 Suppose that Steve offers to supply the component at $2. In offering the price, Steve says that it is a firm
offer not subject to negotiation. Should Pat accept this price and produce the special order? If Pat accepts
the price, what is the change in profits for Steve’s division?
Pat harus menerima harga $2. Harga ini akan meningkatkan biaya komponen
dari $29.600 hingga $32.000 (2 × $2 × 8.000) dan menghasilkan keuntungan tambahan
dari $16.000 ($18.400 – $2.400).
Divisi Steve akan melihat peningkatan laba sebesar $15.200 (8.000 unit × 2 komponen
per unit × $0,95 margin kontribusi per komponen).
3 Assume that Steve’s division is operating at full capacity and that Steve refuses to supply the part for less
than the full price. Should Pat still accept the special order? Explain.
Ya. Pada harga penuh, total biaya komponen adalah $36.800 (2 × $2.30 × 8.000), meningkat sebesar
$7.200 (= 2 × 8.000 × 0,45) dari penawaran awal. Ini masih menyisakan peningkatan laba sebesar $11,200
($18,400 – $7,200). (Lihat jawabannya untuk Persyaratan 1.)
anager of a sister division. Pat’s division was operating below capacity
mer in a market not normally served. The opportunity involves a product
produces requires two of the components. However, the price the
the order, Pat needs a price concession from Steve’s division. Pat had
s aboveboard, Pat had supplied the following unit-cost and price
profits be changed if
ply the part at full
