9-50 CVP Analysis Lawn Master Company, a manufacturer of riding lawn mowers, has a projected income...

Question

9-50 CVP Analysis Lawn Master Company, a manufacturer of riding lawn mowers, has a projected
income for 2010 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
Required
1. Determine the
eakeven point in sales dollars.
2. Determine the required sales in dollars to earn a before-tax profit of $7,250,000.
3. What is the
eakeven point in sales dollars if the variable cost increases by 10 percent?
Solution:
Part 1...

David · Accepted Answer

9-50    CVP Analysis Lawn Master Company, a manufacturer of riding lawn mowers, has a projected 
income for 2010 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
Required 
1.    Determine the breakeven point in sales dollars. 
2.    Determine the required sales in dollars to earn a before-tax profit of $7,250,000. 
3.    What is the breakeven point in sales dollars if the variable cost increases by 10 percent?
Solution:

9-50 CVP Analysis Lawn Master Company, a manufacturer of riding lawn mowers, has a projected income for 2010 as follows: Sales $46,000,000 Operating expenses ...

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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