In: Accounting
Camera Products Inc. produces two different products with the following monthly data for July:
Digital |
|||
Cameras |
Tripods |
Total |
|
Selling price per unit |
$300 |
$100 |
|
Variable cost per unit |
$240 |
$ 60 |
|
Expected unit sales |
28,000 |
7,000 |
35,000 |
Sales mix |
80% |
20% |
100% |
Fixed costs |
$700,000 |
If the sales mix shifts to 85 percent cameras and 15 percent tripods, what happens to the break-even point in units?
Brevard Company makes a single product. The company has monthly fixed costs totaling $250,000 and variable costs of $20 per unit. Each unit of product is sold for $35. Brevard expects to sell 25,000 units each month.
What would be the operating profit if the unit sales price increases 10 percent?
Group of answer choices
$462,500
$212,500
$412,500
$362,500
The following segmented annual income statement is for Action Batteries, Inc.
Product Lines |
||||
C-Cells |
D-Cells |
9-Volt |
Total |
|
Sales revenue |
$50,000 |
$200,000 |
$250,000 |
$500,000 |
Variable costs |
30,000 |
100,000 |
170,000 |
300,000 |
Contribution margin |
$20,000 |
$100,000 |
$ 80,000 |
$200,000 |
Direct fixed costs |
8,000 |
12,000 |
18,000 |
38,000 |
Allocated fixed costs |
? |
? |
? |
45,000 |
Profit (loss) |
$ ? |
$ ? |
$ ? |
$ ? |
The following segmented annual income statement is for Action Batteries, Inc.
Product Lines |
||||
C-Cells |
D-Cells |
9-Volt |
Total |
|
Sales revenue |
$50,000 |
$200,000 |
$250,000 |
$500,000 |
Variable costs |
30,000 |
100,000 |
170,000 |
300,000 |
Contribution margin |
$20,000 |
$100,000 |
$ 80,000 |
$200,000 |
Direct fixed costs |
8,000 |
12,000 |
18,000 |
38,000 |
Allocated fixed costs |
? |
? |
? |
45,000 |
Profit (loss) |
$ ? |
$ ? |
$ ? |
$ ? |
If allocated fixed costs are based on sales revenue for each product line as a proportion of total sales revenue, what is the total profit or (loss) for all product lines?
Group of answer choices
$117,000
$72,000
$252,000
$500,000
If allocated fixed costs are based on sales revenue for each product line as a proportion of total sales revenue, what is the profit or (loss) for D-Cells?
Group of answer choices
$88,000
$70,000
$43,000
$52,000
Camera Products Inc. | ||||||
Particulars | Digital Cameras | Tripods | ||||
Selling Price | 300 | 100 | ||||
Less: | Variable Cost | 240 | 60 | |||
Contribution | 60 | 40 | ||||
Contibution as per Sales Mix | 85% | 15% | ||||
51 | 6 | |||||
Total Contibution per Unit | = | 57 | ||||
Breakeven Point in Units | = | Total Fixed Cost/Contribution Per Unit | ||||
= | 7,00,000/57 | |||||
= | 12,281 Units (Approx) | |||||
No. of Units of Digital Cameras | = | 12,281*85/100 | = | 10,439 | ||
No. of Units of Tripods | = | 12,281*15/100 | = | 1,842 | ||
Brevard Company | ||||||
Particular | Per Unit | Amount | ||||
Sales | 38.5 | 962,500 | ||||
Less: | Variable Cost | 20 | 500,000 | |||
Less: | Fixed Cost | 250,000 | ||||
Operating Profit | 212,500 | |||||
Action Battries | ||||||
Particular | C-Cells | D-Cells | 9_Volt | Total | ||
Sales Revenue | 50,000 | 200,000 | 250,000 | 500,000 | ||
Less: | Variable cost | 30,000 | 100,000 | 170,000 | 300,000 | |
Less: | Direct Fixed Cost | 8,000 | 12,000 | 18,000 | 38,000 | |
Allocated Fixed Cost Ratio | 50 | 200 | 250 | 500 | ||
Less: | Allocated Fixed Cost | 4,500 | 18,000 | 22,500 | 45,000 | |
Total Profit | 7,500 | 70,000 | 39,500 | 117,000 | ||
Total Profit | = | 117,000 | ||||
D-Cells Profit | = | 70,000 |