Question

Equivalent Units of Production

The Converting Department of Soft Touch Towel and Tissue Company had 640 units in work in process at the beginning of the period, which were 60% complete. During the period, 13,600 units were completed and transferred to the Packing Department. There were 720 units in process at the end of the period, which were 30% complete. Direct materials are placed into the process at the beginning of production.

Determine the number of equivalent units of production with respect to direct materials and conversion costs. If an amount is zero, enter in "0".

Soft Touch Towel and Tissue Company
Number of Equivalent Units of Production
	Whole Units	Direct Materials Equivalent Units	Conversion Equivalent Units
Inventory in process, beginning
Started and completed
Transferred to Packing Department
Inventory in process, ending
Total

2.

High-Low Method

The manufacturing costs of Ackerman Industries for the first three months of the year follow:

	Total Costs		Units Produced
January	$196,360		3,750	units
February	167,040		2,080
March	259,840		5,280

Using the high-low method, determine (a) the variable cost per unit and (b) the total fixed cost. Round all answers to the nearest whole dollar.

a. Variable cost per unit	$
b. Total fixed cost	$

3.

Contribution Margin

Harry Company sells 34,000 units at $33 per unit. Variable costs are $21.12 per unit, and fixed costs are $121,200.

Determine (a) the contribution margin ratio, (b) the unit contribution margin, and (c) income from operations.

a. Contribution margin ratio (Enter as a whole number.)		%
b. Unit contribution margin (Round to the nearest cent.)	$	per unit
c. Income from operations	$

4)  

Sales Mix and Break-Even Analysis

Heyden Company has fixed costs of $201,640. The unit selling price, variable cost per unit, and contribution margin per unit for the company's two products follow:

Product	Selling Price		Variable Cost per Unit			Contribution Margin per Unit
QQ	$160		$80			$80
ZZ	100		80			20

The sales mix for Products QQ and ZZ is 85% and 15%, respectively. Determine the break-even point in units of QQ and ZZ. If required, round your answers to the nearest whole number.

a. Product QQ  units

b. Product ZZ  units

Answer 1

Determine the number of equivalent units of production with respect to direct materials and conversion costs. If an amount is zero, enter in "0".

Soft Touch Towel and Tissue Company
Number of Equivalent Units of Production
	Whole Units	Direct Materials Equivalent Units	Conversion Equivalent Units
Inventory in process, beginning	640	0	640*40% = 256
Started and completed	12960	12960	12960
Transferred to Packing Department	13600	12960	13216
Inventory in process, ending	720	720	720*30% = 216
Total	14320	13680	13432

2) Variable cost per unit = (259840-167040)/(5280-2080) = 29

Fixed cost = 259840-(5280*29) = 106720

3) Contribution margin ratio = (33-21.12)/33 = 36%

Unit Contribution margin = 33-21.12 = 11.88

Income from operation = (34000*11.88)-121200 = 282720

4) Weighted average contribution margin = (80*85%+20*15%) = 71

Break even unit = 201640/71 = 2840 Units

Product QQ unit = 2840*85% = 2414

Product ZZ units = 426