Managerial Accounting Assignment \u0323\u0323\u0323\u0323\u0323\u0323\u0323\u0323_Luu Thanh Trung-K13A_ - MANAGERIAL ACCOUNTING ASSIGNMENT Student name Luu Thanh Trung Student ID

Managerial Accounting Assignment ̣̣̣̣̣̣̣̣_Luu Thanh Trung-K13A_

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MANAGERIAL ACCOUNTING ASSIGNMENT Student name: Luu Thanh Trung Student ID: CGS00017287 Course: MBAOUM0314
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TASK 1: CVP Analysis 1. * Success Company’s contribution format income statement for present operation: Total Per Unit Percent Sales (40,000 units) . . . . . . . . . . . . . . $ 800,000 $ 20 % 100 Variable expenses . . . . . . . . . . . . . . . . . 560,000 14 70 Contribution margin . . . . . . . . . . . . . . . . 240,000 6 30 Fixed expenses . . . . . . . . . . . . . . . . . . . 192,000 4.8 Net operating income . . . . . . . . . . . . . . 48,000 1.2 * Success Company’s contribution format income statement for new purchased equipment operation: Total Per Unit Percent Sales (40,000 units) . . . . . . . . . . . . . . $ 800,000 $ 20 % 100 Variable expenses . . . . . . . . . . . . . . . . . 320,000 8 40 Contribution margin . . . . . . . . . . . . . . . . 480,000 12 60 Fixed expenses . . . . . . . . . . . . . . . . . . . 432,000 10.8 Net operating income . . . . . . . . . . . . . . 48,000 1.2 2. a/ - Degree of operating leverage for present operation: DOL = Contribution margin / Operating income = 240,000 / 48,000 = 5 - Degree of operating leverage for proposed new operation: DOL = Contribution margin / Operating income = 480,000 / 48,000 = 10 b/ - Break-even point for present operation in dollars: Contribution margin ratio = contribution margin / sales = 240,000 / 800,000 = 0.3 BEP in dollars = fixed expenses / contribution margin ratio = 192,000 / 0.3 = $ 640,000 - Break-even point for proposed new operation in dollars: Contribution margin ratio = contribution margin / sales = 480,000 / 800,000 = 0.6 BEP in dollars = fixed expenses / contribution margin ratio = 432,000 / 0.6 = $ 720,000 c/ - Safety margin for present operation in dollars: Safety margin in dollars = Budgeted sales – BEP sales = 800,000 – 640,000 = $ 160,000 Safety margin percentage = 160,000 / 800,000 = 20% - Safety margin for proposed new operation in dollars: Safety margin in dollars = Budgeted sales – BEP sales = 800,000 – 720,000 = $ 80,000 Safety margin percentage = 80,000 / 800,000 = 10%
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