Question
In: Accounting
Pin Cushion Company produces two models of sewing basket. Information about Pin Cushion’s products is given...
Pin Cushion Company produces two models of sewing basket. Information about Pin Cushion’s products is given below:
| Product A | Product B | ||||
| Sales revenue | $ | 39,000 | $ | 54,000 | |
| Less: Variable costs | 15,800 | 24,200 | |||
| Contribution margin | $ | 23,200 | $ | 29,800 | |
| Total units sold | 1,000 | 2,040 | |||
Pin Cushion’s fixed costs total $38,500.
Required:
1. Determine Pin Cushion’s weighted-average unit contribution margin and weighted-average contribution margin ratio.
|
2. Calculate Pin Cushion’s break-even units and break-even sales revenue.
|
3. Calculate the number of units of each product that must be sold to break even.
|
||||||||||
4. Calculate the total sales necessary for Pin Cushion to earn a profit of $65,400.
|
5. Calculate the sales revenue generated from each product line if Pin Cushion earns its target profit of $65,400.
|
6. Using the original information, calculate Pin Cushion’s degree of operating leverage.
|
Solutions
Expert Solution
Hope it helps.. In case of any doubts or issues, please do comment below
ekkarill92 answered 2 years agoRelated Solutions
Lindstrom Company produces two fountain pen models. Information about its products follows: Product A Product B...
Lindstrom Company produces two fountain pen models. Information
about its products follows:
Product A
Product B
Sales revenue
$
120,000
$
125,000
Less: Variable costs
60,000
66,000
Contribution margin
$
60,000
$
59,000
Total units sold
7,000
7,000
Lindstrom’s fixed costs total $84,500.
Required:
1. Determine Lindstrom’s weighted-average unit
contribution margin and weighted-average contribution margin ratio.
(Round your weighted-average CM to 2 decimal places and
your CM ratio to 1 decimal place (i.e. .123 should be entered as
12.3%)).
2....
ZZZ Company produces and sells three products. Information about these products for the month of May...
ZZZ Company produces and sells three products. Information
about these products for the month of May is given below:
Product A Product B
selling price per unit $16 $14
variable costs per unit $ 7 $ 6
number of units sold 20,000 25,000
Product C
selling price per unit $20
variable costs per unit $15
number of units sold 24,000
ZZZ Company reported total fixed costs of $166,000 in May.
In order to improve profitability, ZZZ Company made the
following...
Lareem company produces two products. Information on the two products for the most recent year appears...
Lareem
company produces two products. Information on the
two
products for the most recent year appears below:
Product A Product B
selling price per bar $5.00 $3.00
variable costs per bar $2.25 $1.70
number
of units sold 50,000 units 42,000 units
Fixed
costs totaled $108,000.
ABC
Company is considering investing in an advertising
campaign that will double the sales volume of Product B.
ABC
wants to increase next year's profits by 30% over the
most
recent year's profits. Assume the...
Doggie Pawz produces two models of dog beds: rectangle and circle. The following information about the...
Doggie Pawz produces two models of dog beds: rectangle and
circle. The following information about the costs to produce the
company’s products has been provided.
Category
Estimated Cost
Cost Driver
Rectangle
Circle
Unit-Level
$293, 000
Labor Hours
200
300
Batch-Level
$45, 000
Inspections
19
15
Product-Level
$390,000
Storage Space
2900 sq. ft
3700 sq.ft
Facility-Level
$125,000
Machine Hours
4,000
7,000
a. If all costs are allocated based on
machine hours, what is the rate per machine hour?
b. If all...
ABC Company produces and sells four products. Information about these products for 2019, the most recent...
ABC Company produces and sells four products. Information about
these products
for 2019, the most recent year, appears below:
Product A Product B
Product C Product D
selling price per unit 19.00 16.00 15.00 12.00
variable costs per unit 5.00 13.00 5.00 6.00
number of units sold 39,000 32,000 15,000 28,000
ABC Company had total fixed costs of $648,000 in 2019.
Calculate the margin of safety reported by ABC
Company for 2019.
Calculate the number of units of Product...
ABC Company produces and sells four products. Information about these products for 2019, the most recent...
ABC Company produces and sells four products. Information about
these products for
2019, the most recent year, appears below:
Product
A Product B Product C Product D
selling price per unit 19.00 17.00 15.00 12.00
variable costs per unit 5.00 13.00 5.00 6.00
number of units sold 37,000 32,000 14,000 29,000
ABC Company had total fixed costs of $648,000 in 2019.
Calculate the number of units of Product D that
needed to be sold in 2019 in order for
ABC...
ZZ Company produces and sells four products. Information about these products for 2019, the most recent...
ZZ Company produces and sells four products. Information
about these products for 2019, the most recent year,
appears below:
Product A Product B
selling price per unit $18 $16
variable costs per unit $ 6 $ 5
number of units sold 22,000 36,000
Product C Product D
selling price per unit $17 $13
variable costs per unit $13 $ 7
number of units sold 15,000 20,000
ZZ Company reported total fixed costs of $540,000 in
2019.
Calculate the number of...
Cawley Company makes three models of tasers. Information on the three products is given below. Tingler...
Cawley Company makes three models of tasers. Information on the
three products is given below.
Tingler
Shocker
Stunner
Sales
304000
496000
200000
Variable Expenses
149800
193300
139400
Contribution Margin
154200
302700
60600
Fixed Expenses
119984
226816
93200
Net Income
34216
75884
(32600)
Fixed expenses consist of $296,000 of common costs allocated to
the three products based on relative sales, as well as direct fixed
expenses unique to each model of $30,000 (Tingler), $80,000
(Shocker), and $34,000 (Stunner). The common costs...
Cawley Company makes three models of tasers. Information on the three products is given below. Tingler...
Cawley Company makes three models of tasers. Information on the
three products is given below.
Tingler
Shocker
Stunner
Sales
$300,000
$500,000
$200,000
Variable expenses
151,400
197,000
141,800
Contribution margin
148,600
303,000
58,200
Fixed expenses
119,400
229,800
93,900
Net income
$29,200
$73,200
$(35,700)
Fixed expenses consist of $298,000 of common costs allocated to the
three products based on relative sales, as well as direct fixed
expenses unique to each model of $30,000 (Tingler), $80,800
(Shocker), and $34,300 (Stunner). The common costs...
Cawley Company makes three models of tasers. Information on the three products is given below. Tingler...
Cawley Company makes three models of tasers. Information on the
three products is given below. Tingler Shocker Stunner Sales
$300,000 $500,000 $200,000 Variable expenses 151,100 195,300
138,700 Contribution margin 148,900 304,700 61,300 Fixed expenses
120,000 229,600 94,100 Net income $28,900 $75,100 $(32,800) Fixed
expenses consist of $300,000 of common costs allocated to the three
products based on relative sales, as well as direct fixed expenses
unique to each model of $30,000 (Tingler), $79,600 (Shocker), and
$34,100 (Stunner). The common costs...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Explain how advances in technology can force a software subsystem to undergo change or run the...
- Discuss whether you agree or disagree on whether you think E-mails need to be managed and...
- b. Do any unions represent employees in Microsoft? Describe which unions are involved. c. Have there been...
- Look up and use each of these Linux commands. (Each command will have two parts) Summarize...
- What was Lincoln 10 percent plan and what problems did it present?
- A cantilever beam 4m long carries a uniform load of 3.5 kN/m over a portion 1.5m...
- Our next optimization comes from using the brilliant Rabin-Karp substring matching algorithm (RK for short), invented...
ADVERTISEMENT