Maurice Tutor

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Category > Accounting Posted 24 Jul 2017 My Price 5.00

Rezler Company’s controller

Rezler Company’s controller prepared the following budgeted income statement for the coming year:
Sales …………………………………….$315,000
Less: Variable expenses ………………….141,750
Contribution margin …………………….$173,250
Less: Fixed expenses ……………………...63,000
Operating income ………………………$110,250

Required:
1. What is Rezler’s variable cost ratio? What is its contribution margin ratio?
2. Suppose Rezler’s actual revenues are $30,000 more than budgeted. By how much will operating income increase? Give the answer without preparing a new income statement.
3. How much sales revenue must Rezler earn to break even? Prepare a contribution margin income statement to verify the accuracy of your answer.
4. What is Rezler’s expected margin of safety?
5. What is Rezler’s margin of safety if sales revenue is $280,000?

Answers

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Status NEW Posted 24 Jul 2017 12:07 PM My Price 5.00

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