# For the current year ending January 31, Ringo Company expects fixed costs of \$178, 500 and a unit variable cost of \$41.50. For the coming year, a new wage contract will increase the unit variable cost to \$45. The selling price of \$50 per unit is expected to remain the same. Compute the break-even sales (in units) for the current year. Compute the anticipated break-even sales (in units) for the coming year, assuming the new wage contract is signed.

The break-even sales (in units u) for the current year is 210,000 units.

The anticipated break-even sales (in units t) for the coming year, assuming the new wage contract is signed is 357,000 units.

Explanation:

The BEP which is the break even point is the point where the company's sales or revenue generated is equal to the cost incurred. As such, the BEP is the number of units that must be sold for the company to make neither a profit nor a loss.

Both sales and variable cost are dependent on the number of units sold.

The sales less the variable cost gives the contribution margin. The contribution margin less the fixed cost gives the net operating income.

The break-even sales (in units u) for the current year

50u - 41.5u - 1785000 = 0

8.5u = 1785000

u = 1785000/8.5

= 210,000 units

The anticipated break-even sales (in units t) for the coming year, assuming the new wage contract is signed

50u - 45u - 1785000 = 0

5u = 1785000

u = 1785000/5

= 357,000 units

## Related Questions

The balance in accounts receivable at the beginning of 2021 was \$690. During 2021, \$3,200 of credit sales were recorded. If the ending balance in accounts receivable was \$170 and \$100 in accounts receivable were written off during the year, the amount of cash collected from customers during 2021 was:

\$3,620

Explanation:

Accounts receivable at the beginning + recorded credit sales -accounts receivable written off -ending balance accounts receivable.

Therefore:

\$690+\$3,200-\$100-\$170 =\$3,620

Soriano Company had net sales of \$300,000 for the month (after returns and allowances of \$1,500 and sales discounts of \$3,250). Beginning inventory for the month was \$60,000; purchases for the month were \$175,000; and gross profit was 43%. What was the ending inventory for the month?

Ending Inventory  \$ 64,000

Explanation:

To define the final inventory of the company it's necessary to find the cost of good of the period.

As the company had a 43% of gross profit, it means that for every dollar of sales we have 0,43 dollar of Gross Profit, with this value is possible to know the total cost of the goods sold during the period, that it's the difference between Sales Revenue and Gross Profit.

Total Sales Revenue had to be the net value after returns and discounts as it's detailed.

Income Statement

Sales revenue        \$ 300,000

Cost of goods sold  -\$ 171,000

Gross Profit            \$ 129,000 43%

Beginning Inventory  \$ 60,000

Purchases                  \$ 175,000

Cost of goods sold  -\$ 171,000

Ending Inventory    \$ 64,000

A company sells 10,000 shares of previously authorized stock at the par value of \$10 per share. What's the correct entry to record the transaction?

The correct entry to record the transaction concerning the company's sale of 10,000 shares of previously authorized stock is a debit to Cash of \$100,000 and a credit to Common Stock \$100,000.

### Data Analysis:

Number of shares sold = 10,000

Par value =\$10 per share

Cash \$100,000 Common Stock \$100,000

Thus, the correct entry to record this stock sale is a debit to Cash of \$100,000 and a credit to Common Stock \$100,000.

The correct journal entry to record the transaction would be to debit Cash for \$100,000 and credit Common Stock for \$100,000 in line with the number of shares sold and their par value.

### Explanation:

When a company sells shares of its authorized stock at par value, the funds received are recorded in the company's financial accounts. The correct journal entry would be to debit (increase) Cash, and credit (increase) Common Stock. In this scenario, where 10,000 shares of stock are sold at a par value of \$10 per share, this would result in a \$100,000 increase in both the company's Cash and Common Stock accounts. The journal entry would look like this:

• Debit Cash \$100,000
• Credit Common Stock \$100,000

It is crucial to understand the stock issuing process, such as rate of return, in the business world. Investors purchase stock with an expectation either to receive dividends or to experience a capital gain- an increase in the stock value.

brainly.com/question/33953780

#SPJ6

A company finds that there is a linear relationship between the amount of money that it spends on advertising and the number of units it sells. If it spends no money on advertising, it sells units. For each additional spent, an additional units are sold. (a) If is the amount of money that the company spends on advertising, find a formula for , the number of units sold as a function of .

y = 0.01x + 300

Explanation:

There are some missing information in the question that are shown below:

If it spends no money on advertising, it sells 300 units

Given that

Number of units sold in case of no money spending = 300 units

Additional units sold = 15 units

By considering the above information, the formula is presented below:

y = 0.01x + 300

where,

0.01X is come from

= (Number of units sold in case of no money spending + Additional units sold - Number of units sold in case of no money spending) ÷ (Additional money spent)

= (300 units + 15 units - 300 units) ÷ (\$1,500)

= 0.01X

Rates on fixed, floating, installment and mortgage loans were reduced by 0.3 percent (from 9.3% to 9.0% etc.). Which were impacted the most

This depends on the type of interest charged and the length of the loan. Generally speaking, floating loans should adjust semi-automatically to changes in interest rates. So any change affects them directly.

On the other hand, fixed rate loans, most mortgages and installment loans generally carry a fixed interest rate that doesn't depend on the market interest rate. Some mortgages (around 33% of total) are variable rate mortgages that are affected by changes in the market interest rate, but they adjust on a yearly basis.

Shown below are selected data from the financial statements of the Supreme Company. (Dollar amounts are in millions, except for the per share data). Income statement data:

\$'000
Net sales \$1,230
Cost of goods sold \$520
Operating expenses \$440
Net income \$390
Balance sheet data:

\$'000
Average total equity \$2,400
Average total assets \$4,000
Supreme reported earnings per share for the year of \$4 and paid cash dividends of \$1 per share.

At year-end, the Wall Street Journal listed Supreme's capital stock as trading at \$88 per share.

Required:

Compute the following:

a). Gross profit rate

b). Supreme's operating income (in millions)

c). Return on assets

d). Return on equity

e). Price-earning ratio

a. Gross profit rate =   Gross profit / sales

= \$710,000 * 100

\$1,230,000

=  57.72%

b. Supreme Operating Income

Gross Profit                           \$710,000

Operating expenses             (440,000)

Operating Profit                     270,000

c. Return on Asset  =   Return/  Average Asset

=   \$390,000 * 100

\$4,000,000

=   9.75%

d. Return on equity  =   Return / Average equity

=   \$390,000 * 100

\$2,400,000

=      16.25%

e. Price-earnings ratio  =  Market price per share / earnings per share

=   \$88/ \$4

=  22

Explanation:

Computation of Gross profit

\$'000

Net Sales                                1,230

Cost of goods sold                 (520)

Gross Profit                              710