Question

1.Vaughn Manufacturing can produce and sell only one of the following two products: Oven Contribution Hours Required Margin Per Unit Muffins 0.2 $7 Coffee Cakes 0.3 $8 The company has oven capacity of 3750 hours. How much will contribution margin be if it produces only the most profitable product?

2.How much sales are required to earn a target income of $340000 if total fixed costs are $500000 and the contribution margin ratio is 40%?

3.Bramble Corp. manufactures a product with a unit variable cost of $100 and a unit sales price of $186. Fixed manufacturing costs were $480000 when 10000 units were produced and sold. The company has a one-time opportunity to sell an additional 1000 units at $125 each in a foreign market which would not affect its present sales. If the company has sufficient capacity to produce the additional units, acceptance of the special order would affect net income as follows:

4. Bramble’s CVP income statement included sales of 6200 units, a selling price of $50, variable expenses of $30 per unit, and net income of $25000. Fixed expenses are $310000. $99000. $124000. $186000.

5.It costs Concord Corporation $12 of variable and $5 of fixed costs to produce one bathroom scale which normally sells for $35. A foreign wholesaler offers to purchase 2300 scales at $15 each. Garner would incur special shipping costs of $1 per scale if the order were accepted. Concord has sufficient unused capacity to produce the 2300 scales. If the special order is accepted, what will be the effect on net income? $4600 decrease $6900 decrease $4600 increase $34500 increase

6.Swifty Corporation produces 1000 units of a necessary component with the following costs: Direct Materials $31000 Direct Labor 12000 Variable Overhead 11000 Fixed Overhead 10000 Swifty Corporation could avoid $6000 in fixed overhead costs if it acquires the components externally. If cost minimization is the major consideration and the company would prefer to buy the components, what is the maximum external price that Swifty Corporation would accept to acquire the 1000 units externally? $53000 $58000 $60000 $54000

7.In applying the high-low method, what is the fixed cost? Month Miles Total Cost January 86000 $182000 February 64000 160000 March 78000 178000 April 94000 220000 $32000 $22000 $42000 $60000

8.At the high level of activity in November, 5000 machine hours were run and power costs were $18000. In April, a month of low activity, 1000 machine hours were run and power costs amounted to $9000. Using the high-low method, the estimated fixed cost element of power costs is $6750. $11250. $18000. $9000.

9.The required sales in units to achieve a target net income is (sales + target net income) divided by contribution margin per unit. (fixed cost + target net income) divided by contribution margin ratio. (sales + target net income) divided by contribution margin ratio. (fixed cost + target net income) divided by contribution margin per unit. Click if you would like to Show Work for this question: Open Show Wor

10.Variable costs for Coronado Industries are 40% of sales. Its selling price is $75 per unit. If Coronado sells one unit more than break-even units, how much will profit increase?

11.Crane Company produces only one product. Monthly fixed expenses are $13000, monthly unit sales are 5000, and the unit contribution margin is $10. How much is monthly net income? $63000 $0 $50000 $37000

12.Crane Company produces 1000 units of a necessary component with the following costs: Direct Materials $36000 Direct Labor 25000 Variable Overhead 5000 Fixed Overhead 7000 None of Crane Company‘s fixed overhead costs can be reduced, but another product could be made that would increase profit contribution by $8000 if the components were acquired externally. If cost minimization is the major consideration and the company would prefer to buy the components, what is the maximum external price that Crane Company would be willing to accept to acquire the 1000 units externally? $76000 $74000 $63000 $69000

13.Sheridan Company’s unit manufacturing cost is: Variable Costs $50 Fixed Costs 25 A special order for 2000 units has been received from a foreign company. The unit price requested is $54. The normal unit price is $95. If the order is accepted, unit variable costs will increase by $2 for additional freight costs. If the order is accepted, incremental profit (loss) will be $4000. $(42000). $40000. $(46000).

14.Sheffield Corp. can produce 100 units of a component part with the following costs: Direct Materials $20000 Direct Labor 4500 Variable Overhead 14000 Fixed Overhead 11000 If Sheffield Corp. can purchase the component part externally for $45000 and only $4000 of the fixed costs can be avoided, what is the correct make-or-buy decision?

Answer 1

Solution:

There are 10 individual questions. I am giving the answer of Problem 1.. Pls ask separate question for each part.

Problem 1 --- Vaughn

	Muffins	Coffee Cakes
Contribution Margin Per Unit (A)	$7	$8
Over hours required (B)	0.20	0.30
Contribution Margin per unit per hour (A/B)	$35	$27

Since Contribution Margin per unit per hour is higher of Muffins, the company should go for production of Muffins since it provides highest contribution margin per limited resources.

Oven Capacity Hours = 3750 Hours

Contribution Margin Per Hour of Muffins = $35

Total Contribution Margin from Muffins (the most profitable product) = $35*3750 = $131,250

Hope the above calculations, working and explanations are clear to you and help you in understanding the concept of question.... please rate my answer...in case any doubt, post a comment and I will try to resolve the doubt ASAP…thank you

Pls ask separate question for remaining parts.