Question
In: Accounting
Giro Inc. manufactures and sells bicycle safety helmets. Price and cost data for the product follows:...
Giro Inc. manufactures and sells bicycle safety helmets. Price and cost data for the product follows:
|
Selling price per unit |
$25.00 |
|
Variable costs per unit: |
|
|
Direct Materials |
10.50 |
|
Direct Labour |
5.00 |
|
Manufacturing overhead |
3.00 |
|
Selling expenses |
1.30 |
|
Total variable cost per unit |
$19.80 |
|
Annual total fixed costs: |
|
|
Manufacturing overhead |
$192,000 |
|
Selling and administrative |
276,000 |
|
Total fixed costs |
$468,000 |
|
Forecasted annual sales volume in units |
120,000 |
Required:
- Calculate Giro’s margin of safety in sales dollars.
- How many units does the company have to sell in order to generate a net income figure of $600,000? The company has a 35% tax rate.
- Giro is looking at the possibility of renting a machine at an annual cost of $90,000. This machine would allow Giro to reduce its direct labor costs by 15% and its variable manufacturing overhead costs by 5%. Advise Giro as to what the company should do.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
ABC Inc. manufactures and sells toys. Price and cost data are as follows: Selling price per...
ABC Inc. manufactures and sells toys.
Price and cost data are as follows:
Selling price per unit (package of 2
CDs)......................................
$20.00
Variable costs per unit:
Direct
material...............................................................................................................
$4.00
Direct
labor......................................................................................................................
$5.00
Artist's
royalties..............................................................................................................
$3.50
Manufacturing
overhead..........................................................................................
$3.00
Selling
expenses............................................................................................................
$1.00
Total variable costs per
unit............................................................
$16.50
Annual fixed costs:
Manufacturing
overhead..........................................................................................
$180,000
Selling and
administrative.......................................................................................
$220,000
Total fixed
costs................................................................................
$400,000
Forecasted annual sales volume (120,000
units).........................
$2,400,000
If the company's direct-labor costs do increase by 8%,
what selling price...
Maxwell Company manufactures and sells a single product. Price and cost data regarding Maxwell’s product and...
Maxwell Company manufactures and sells a single product. Price
and cost data regarding Maxwell’s product and operations for fiscal
year 2016 are as follows (presented under absorption or full
costing):
_____________________________________________________________________________
Revenue (120,000 units)
$3,000,000
Less: Cost of sales
Direct
materials
$1,320,000
Directed
Labor
600,000
Variable
manufacturing overhead
300,000
Fixed
manufacturing overhead
192,000
2,412,000
Gross margin
$588,000
Less: Variable selling expenses
$156,000
Fixed
selling and administrative...
Protector, Inc. has two product lineslong dashbatting helmets and football helmets. The income statement data for...
Protector, Inc. has two product lineslong dashbatting helmets
and football helmets. The income statement data for the most recent
year is as follows: Total Batting Helmets Football Helmets Sales
revenue $ 1 comma 040 comma 000 $ 700 comma 000 $ 340 comma 000
Variable costs (440 comma 000) (150 comma 000) (290 comma
000) Contribution margin $ 600 comma 000 $ 550 comma 000 $ 50
comma 000 Fixed costs (160 comma 000) (70 comma 000) (90 comma
000)...
Python Programming Question Bicycle shop. A bicycle shop sells bikes and helmets. Some people already own...
Python Programming Question
Bicycle shop. A bicycle shop sells bikes and helmets.
Some people already own helmets, so on average the shop sells three
helmets for every five bicycles. Helmets cost $50 and bikes cost
$250. Write a program that prompts for the number of bikes that the
shop expects to sell over the next month and outputs the total
amount of expected revenue.
You should not be using eval() at all; use int() or float()
instead when called for.
Head-First Company now sells both bicycle helmets and motorcycle helmets. Next year, Head- First expects to...
Head-First Company now sells both bicycle helmets and motorcycle
helmets. Next year, Head- First expects to produce total revenue of
$585,000 and incur total variable cost of $372,000. Total fixed
cost is expected to be $60,000.
Required:
1.
Calculate the break-even point
in sales dollars for Head-First. Round the contribution margin
ratio to four decimal places and sales to the nearest
dollar.
2.
Check your answer by preparing a contribution margin income
statement.
Required:
1.
Calculate the break-even point
in...
Denton Company manufactures and sells a single product. Cost data for the product are given: Variable...
Denton Company manufactures and sells a single product. Cost
data for the product are given:
Variable costs per unit:
Direct materials
$
4
Direct labor
10
Variable manufacturing
overhead
2
Variable selling and
administrative
3
Total variable cost per
unit
$
19
Fixed costs per month:
Fixed manufacturing
overhead
$
75,000
Fixed selling and
administrative
166,000
Total fixed cost per month
$
241,000
The product sells for $50 per unit. Production and sales data
for July and August, the first...
Denton Company manufactures and sells a single product. Cost data for the product are given: Variable...
Denton Company
manufactures and sells a single product. Cost data for the product
are given:
Variable costs
per unit:
Direct
materials
$
3
Direct
labor
9
Variable
manufacturing overhead
4
Variable selling
and administrative
1
Total variable
cost per unit
$
17
Fixed costs per
month:
Fixed
manufacturing overhead
$
108,000
Fixed selling
and administrative
166,000
Total fixed cost
per month
$
274,000
The product sells for
$53 per unit. Production and sales data for July and August, the
first...
Denton Company manufactures and sells a single product. Cost data for the product are given: Variable...
Denton Company manufactures and sells a single product. Cost
data for the product are given:
Variable costs per unit:
Direct materials
$
5
Direct labor
10
Variable manufacturing overhead
3
Variable selling and administrative
3
Total variable cost per unit
$
21
Fixed costs per month:
Fixed manufacturing overhead
$
120,000
Fixed selling and administrative
166,000
Total fixed cost per month
$
286,000
The product sells for $50 per unit. Production and sales data
for July and August, the first...
Denton Company manufactures and sells a single product. Cost data for the product are given: Variable...
Denton Company manufactures and sells a single product. Cost
data for the product are given:
Variable costs per unit:
Direct materials
$
4
Direct labor
10
Variable manufacturing overhead
3
Variable selling and administrative
2
Total variable cost per unit
$
19
Fixed costs per month:
Fixed manufacturing overhead
$
72,000
Fixed selling and administrative
163,000
Total fixed cost per month
$
235,000
The product sells for $51 per unit. Production and sales data
for July and August, the first...
Denton Company manufactures and sells a single product. Cost data for the product are given: Variable...
Denton Company manufactures and sells a single product. Cost
data for the product are given:
Variable costs per unit:
Direct materials
$
4
Direct labor
11
Variable manufacturing
overhead
4
Variable selling and
administrative
2
Total variable cost per
unit
$
21
Fixed costs per month:
Fixed manufacturing
overhead
$
90,000
Fixed selling and
administrative
163,000
Total fixed cost per month
$
253,000
The product sells for $47 per unit. Production and sales data
for July and August, the first...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- ANALYSING A SPREADSHEET AND PRESENTING A BUSINESS REPORT Case Study Pink Lady Apple Orchard is a...
- An automobile is traveling on a long, straight highway at a steady 75.0 m/h when the...
- Give the net ionic equations for the following: a. AgCl + ZnCl2 b. PbCl2 + Hg2Cl2...
- Liquefaction, the process of forming a liquid typically from a gas, can be accomplished by changing...
- A lead ball is dropped into a lake from a diving board 12.0 ft above the...
- I would like to ask this question about ethics in business. Thank you. Maurice Stokes was...
- Please answer all of the following for thumbs up: Explain the problem of intellectual property theft....
ADVERTISEMENT