Lawn Master company, a manufacturer of riding lawn mowers, has a projected income for 2013 as follows: Sales 46,000,000 Operating expenses: Variable expenses $32,200,000 Fixed expenses $7,500,000 Total expenses 39,700,000 Operating profit $6,300,000 9-33 questions: 1. Determine the breakeven point in sales dollars. 2. Determine the required sales in dollars to earn a before tax profit of $8,000,000. 3. What is the breakeven point in sales dollars if the variable cost increases by 12%? 10-55 Kelly Company is a retail sporting goods store. Facts regarding Kelly’s operations are as follows: – Sales, all on account, are budgeted at $220,000 for December and $200,000 for January. – Collections are expected to be 60% in the month of sale an= d 38% in the month following the sale. -Gross margin is 25% of sales. – A total of 80% of the merchandise sold in a month is p
urchased in the month prior to the month of sale and 20% is purchased in the mo= nth of sale. Payment for purchased merchandise is made in the month following the purchase. – Other expenses [selling and administrative] to be paid in = cash each month are $22,600. – Annual depreciation is $216,000, one-twelfth of which= is reflected as part of monthly operating expenses. Kelly Company’s statement of financial position at the close of business on November 30 as follows: Kelly Company Statement of Financial Position November 30, 2013 Cash = $22,000 Accounts receivable(net of $4,000 = 76,000 Allowance for doubtful accounts) Inventory = 132,000 Property, plant, and equipment(net of $680,000 accumulated depreciation) 870,000= Total Assets $1,100,= 000 Accounts payable $162,000 Common stock = 800,000 Retaining earnings = 138,000 Total liabilities and equity = $1,100,000