Question

In: Accounting

T&G Co. manufactures three types of computer desks. The income statement for the three products and...

T&G Co. manufactures three types of computer desks. The income statement for the three products and the whole company is shown below:

Product A Product B Product C Total
Sales $75,000 $95,000 $105,000 $275,000
Variable costs 40,000 60,000 95,000 195,000
Fixed costs 22,400 16,000 16,000 54,400
Total costs 62,400 76,000 111,000 249,400
Operating income (loss) $12,600 $19,000 $(6,000 ) $25,600


The company produces 1,000 units of each product. The company’s capacity is 17,000 machine hours. The machine hours for each product are 7 hours for Product A, 5 hours for Product B, and 5 hours for Product C. Fixed costs are allocated based on machine hours.

a) The company has a contract that requires it to supply 430 units of each product to a customer. The total market demand for a single product is limited to 1,500 units. How many units of each product should the company manufacture to maximize its total contribution margin including the contract?

T&G Co. should manufacture
Product A units
Product B units
Product C units

Solutions

Expert Solution

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

T&G Co. manufactures three types of computer desks. The income statement for the three products and...
T&G Co. manufactures three types of computer desks. The income statement for the three products and the whole company is shown below: Product A Product B Product C Total Sales $76,000 $104,000 $115,000 $295,000 Variable costs 41,000 69,000 105,000 215,000 Fixed costs 25,900 18,500 18,500 62,900 Total costs 66,900 87,500 123,500 277,900 Operating income (loss) $9,100 $16,500 $(8,500 ) $17,100 The company produces 1,000 units of each product. The company’s capacity is 17,000 machine hours. The machine hours for each...
The DC Desk Company manufactures two types of computer desks from laminated particle board. The Senior...
The DC Desk Company manufactures two types of computer desks from laminated particle board. The Senior Geek model requires 30 square feet of particle board, 1 keyboard sliding tray and 5 hours of labor to fabricate. This model has a net profit of $105. The Jr. Geek model requires 24 square feet of particle board, 1 keyboard sliding tray and 3 hours of labor to fabricate. The Jr. Geek model has a net profit of $95. During the next production...
Variable and Absorption Costing—Three Products Winslow Inc. manufactures and sells three types of shoes. The income...
Variable and Absorption Costing—Three Products Winslow Inc. manufactures and sells three types of shoes. The income statements prepared under the absorption costing method for the three shoes are as follows: Winslow Inc. Product Income Statements—Absorption Costing For the Year Ended December 31, 20Y1 Cross Training Shoes Golf Shoes Running Shoes Revenues $559,800 $324,700 $269,500 Cost of goods sold 291,100 159,100 180,600 Gross profit $268,700 $165,600 $88,900 Selling and administrative expenses 231,100 119,200 148,500 Income (loss) from operations $37,600 $46,400 $(59,600)...
Variable and Absorption Costing—Three Products Winslow Inc. manufactures and sells three types of shoes. The income...
Variable and Absorption Costing—Three Products Winslow Inc. manufactures and sells three types of shoes. The income statements prepared under the absorption costing method for the three shoes are as follows: Winslow Inc. Product Income Statements—Absorption Costing For the Year Ended December 31, 20Y1 Cross Training Shoes Golf Shoes Running Shoes Revenues $340,200 $200,700 $172,600 Cost of goods sold (176,900) (98,300) (115,600) Gross profit $163,300 $102,400 $57,000 Selling and administrative expenses (140,400) (73,700) (95,200) Operating income $22,900 $28,700 $(38,200) In addition,...
Variable and Absorption Costing—Three Products Winslow Inc. manufactures and sells three types of shoes. The income...
Variable and Absorption Costing—Three Products Winslow Inc. manufactures and sells three types of shoes. The income statements prepared under the absorption costing method for the three shoes are as follows: Winslow Inc. Product Income Statements—Absorption Costing For the Year Ended December 31, 20Y1 Cross Training Shoes Golf Shoes Running Shoes Revenues $533,200 $314,600 $270,600 Cost of goods sold (277,300) (154,200) (181,300) Gross profit $255,900 $160,400 $89,300 Selling and administrative expenses (220,100) (115,500) (149,100) Operating income $35,800 $44,900 $(59,800) In addition,...
Variable and Absorption Costing—Three Products Winslow Inc. manufactures and sells three types of shoes. The income...
Variable and Absorption Costing—Three Products Winslow Inc. manufactures and sells three types of shoes. The income statements prepared under the absorption costing method for the three shoes are as follows: Winslow Inc. Product Income Statements—Absorption Costing For the Year Ended December 31, 20Y1 Cross Training Shoes Golf Shoes Running Shoes Revenues $472,600 $297,700 $250,100 Cost of goods sold 245,800 145,900 167,600 Gross profit $226,800 $151,800 $82,500 Selling and administrative expenses 195,000 109,300 137,800 Income (loss) from operations $31,800 $42,500 $(55,300)...
Variable and Absorption Costing—Three Products Winslow Inc. manufactures and sells three types of shoes. The income...
Variable and Absorption Costing—Three Products Winslow Inc. manufactures and sells three types of shoes. The income statements prepared under the absorption costing method for the three shoes are as follows: Winslow Inc. Product Income Statements—Absorption Costing For the Year Ended December 31, 20Y1 Cross Training Shoes Golf Shoes Running Shoes Revenues $519,900 $296,300 $257,800 Cost of goods sold (270,300) (145,200) (172,700) Gross profit $249,600 $151,100 $85,100 Selling and administrative expenses (214,700) (108,800) (142,100) Operating income $34,900 $42,300 $(57,000) In addition,...
Variable and Absorption Costing—Three Products Winslow Inc. manufactures and sells three types of shoes. The income...
Variable and Absorption Costing—Three Products Winslow Inc. manufactures and sells three types of shoes. The income statements prepared under the absorption costing method for the three shoes are as follows: Winslow Inc. Product Income Statements—Absorption Costing For the Year Ended December 31, 20Y1 Cross Training Shoes Golf Shoes Running Shoes Revenues $360,800 $212,900 $181,000 Cost of goods sold 187,600 104,300 121,300 Gross profit $173,200 $108,600 $59,700 Selling and administrative expenses 149,000 78,200 99,700 Income (loss) from operations $24,200 $30,400 $(40,000)...
Variable and Absorption Costing—Three Products Winslow Inc. manufactures and sells three types of shoes. The income...
Variable and Absorption Costing—Three Products Winslow Inc. manufactures and sells three types of shoes. The income statements prepared under the absorption costing method for the three shoes are as follows: Winslow Inc. Product Income Statements—Absorption Costing For the Year Ended December 31, 20Y1 Cross Training Shoes Golf Shoes Running Shoes Revenues $396,100 $229,700 $199,800 Cost of goods sold 206,000 112,600 133,900 Gross profit $190,100 $117,100 $65,900 Selling and administrative expenses 163,500 84,300 110,100 Income (loss) from operations $26,600 $32,800 $(44,200)...
Henna Co. produces and sells two products, T and O. It manufactures these products in separate...
Henna Co. produces and sells two products, T and O. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company sold 43,000 units of each product. Sales and costs for each product follow. Product T Product O Sales $ 761,100 $ 761,100 Variable costs 608,880 76,110 Contribution margin 152,220 684,990 Fixed costs 33,220 565,990 Income before taxes 119,000 119,000 Income taxes (30% rate) 35,700 35,700 Net income $...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT