Author Question: Skipmar Company produces a molded briefcase that is distributed to luggage stores. The following ... (Read 16 times)

xsk4r3kr0w · **on:** Feb 5, 2023

Skipmar Company produces a molded briefcase that is distributed to luggage stores. The following operating data for the current year has been accumulated for planning purposes.

Sales price	$ 40.00
Variable cost of goods sold	12.00
Variable selling expenses	10.60
Variable administrative expenses	3.00
Annual fixed expenses:
Overhead	$7,800,000
Selling expenses	1,650,000
Administrative expenses	3,150,000

Skipmar can produce 1.5 million cases a year. The projected net income for the coming year is expected to be $1.8 million. Skipmar is subject to a 40% income tax rate.

During the planning sessions, Skipmar's managers have been reviewing costs and expenses. They estimate that the company's variable cost of goods sold will increase 15% in the coming year and that fixed administrative expenses will increase by $150,000. All other costs and expenses are expected to remain the same.

Required:

a.	What amount of sales revenue will Skipmar need to achieve in the coming year

to earn the projected net income of $1.8 million?

b.	What price would Skipmar need to charge for the briefcase in the coming year

to maintain the current year's contribution margin ratio?

ladan86 · **Reply #1 on:** Feb 5, 2023

A FREE account is required to view all solutions!

Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.

Answer Preview

Only 50% of students answer this correctly