Question

In: Accounting

1) If the selling price per unit is? $100, total fixed expenses are? $600,000, and the...

1) If the selling price per unit is? $100, total fixed expenses are? $600,000, and the breakeven sales in dollars is? $800,000, what is the variable expense per? unit?

2)

Mama's Favorite Appliances manufactures two? products: Food Processors and Espresso Machines. The following data are? available:

Food Processors

Espresso Makers

Sales price

?$125

?$225

Variable costs

?$50

?$150

The company can manufacture two food processors per machine hour and three espresso machines per machine hour. The? company's production capacity is? 1,200 machine hours per month.

To maximize? profits, what product and how many units should the company produce in a? month?

A.

?3,600 Espresso Machines and 0 Food Processors

B.

?2,400 Food Processors and 0 Espresso Machines

C.

300 Food Processors and 675 Espresso Machines

D.

?2,400 Food Processors and? 3,600 Espresso Machines

Solutions

Expert Solution

1) contribution margin ratio = fixed cost/Breakeven sales in dollars
= 600000/800000
= 0.75
Contribution = (Selling price per unit)*CM ratio
= $100*0.75
=$75
Therefore variable cost per unit = selling price per unit-contribution margin = 100-75 = $25
2) Particulars Food processors Espresso Makers
a sale price $125 $225
b less:variable cost ($50) ($150)
c contribution margin(a-b) $75 $75
d products manufactured per machine hour 2 3
e contribution margin per machine hour(c*d) $150 $225
contribution margin per machine hour is highest for Espresso Makers
therefore to maximise profits the company should produce 1200hrs*3 = 3600 Espresso Makers and 0 Food processors
Answer: (A) 3600 Espresso makers and 0 Food Processors

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

2) Assume the following (1) selling price per unit = $25, (2) total fixed expenses =...
2) Assume the following (1) selling price per unit = $25, (2) total fixed expenses = $21,894, (3) the contribution margin ratio = 37%, and (4) net operating income = $10,000. Given these four assumptions, unit sales must be: A) 2172 B) 1276 C) 3448 D) 4310 3)Assume a company is preparing a budget for its first two months of operations. During the first and second months it expects credit sales of $45,000 and $75,000, respectively. The company expects to...
Assume the following (1) selling price per unit = $34, (2) total fixed expenses = $9,074,...
Assume the following (1) selling price per unit = $34, (2) total fixed expenses = $9,074, (3) the contribution margin ratio = 33%, and (4) net operating income = $10,000. Given these four assumptions, unit sales must be: Multiple Choice 1,139 units. 561 units. 2,278 units. 1,700 units. Assume the following (1) selling price per unit = $25, (2) variable expense per unit = $13, (3) the total fixed expenses = $15,400, and (4) net operating income = $17,900. Given...
    Per Unit .       % of sales Selling price . $75 . 100% Variable Expenses ....
    Per Unit .       % of sales Selling price . $75 . 100% Variable Expenses . $45 . 60% Contribution Margin . $30 40% Fixed expenses are $75,000 per month and the company is selling 3,000 units per month. 2. Refer to the original data . Management is considering using higher quality components that would increase variable cost by $3 per unit. The manager believes that the higher quality product would increase sales by 15% per month. Should the higher...
If a company decreases the variable expense per unit while increasing the total fixed expenses, the...
If a company decreases the variable expense per unit while increasing the total fixed expenses, the total expense line relative to its previous position will: shift upward and have a steeper slope. shift downward and have a steeper slope. shift upward and have a flatter slope. shift downward and have a flatter slope.
Exercise 5-13 Changes in Selling Price, Sales Volume, Variable Cost per Unit, and Total Fixed Costs...
Exercise 5-13 Changes in Selling Price, Sales Volume, Variable Cost per Unit, and Total Fixed Costs [LO5-1, LO5-4] Miller Company’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (36,000 units) $ 252,000 $ 7.00 Variable expenses 144,000 4.00 Contribution margin 108,000 $ 3.00 Fixed expenses 49,000 Net operating income $ 59,000 Required: (Consider each case independently): 1. What is the revised net operating income if unit sales increase by 15%? 2. What...
Given the following information: Selling Price (per unit): $10,000 Variable Costs (per unit): $7,000 Fixed Costs:...
Given the following information: Selling Price (per unit): $10,000 Variable Costs (per unit): $7,000 Fixed Costs: $200,000 Required Each of these are separate situations: What is the break-even point in total sales in dollars? How many units need to be sold to make a profit of $20,000? How many units need to be sold to make a profit of $20,000 if fixed costs increase from $200,000 to $250,000? How many units would they need to sell if they wanted to...
Given the following information: Selling Price (per unit): $10,000 Variable Costs (per unit): $7,000 Fixed Costs:...
Given the following information: Selling Price (per unit): $10,000 Variable Costs (per unit): $7,000 Fixed Costs: $200,000 Required Each of these are separate situations: What is the break-even point in total sales in dollars? How many units need to be sold to make a profit of $20,000? How many units need to be sold to make a profit of $20,000 if fixed costs increase from $200,000 to $250,000? How many units would they need to sell if they wanted to...
Given the following Selling Price: 50$ per unit Variable Cost: 40$ per unit Fixed Cost: 80,000$...
Given the following Selling Price: 50$ per unit Variable Cost: 40$ per unit Fixed Cost: 80,000$ per unit Calculate: A. Contribution margin as well as the contribution margin ratio B. Profit(loss) if 7,200 units are sold C. Margin of safety if 10,100 units are sold D. Break even point in dollars
Steven Company has fixed costs of $239,080. The unit selling price, variable cost per unit, and...
Steven Company has fixed costs of $239,080. The unit selling price, variable cost per unit, and contribution margin per unit for the company's two products are provided below. Product Selling Price per unit Variable Cost per unit Contribution Margin per unit X $1,248 $468 $780 Y 473 253 220 The sales mix for products X and Y is 60% and 40% respectively. Determine the break-even point in units of X and Y combined. Round answer to nearest whole number. units...
Steven Company has fixed costs of $239,080. The unit selling price, variable cost per unit, and...
Steven Company has fixed costs of $239,080. The unit selling price, variable cost per unit, and contribution margin per unit for the company's two products are provided below. Product Selling Price per unit Variable Cost per unit Contribution Margin per unit X $1,248 $468 $780 Y 473 253 220 The sales mix for products X and Y is 60% and 40% respectively. Determine the break-even point in units of X and Y combined. Round answer to nearest whole number. units
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT