Question

In: Accounting

CVP Analysis (9pts): The Ood Sphere, Ltd. produces and sells a single product, gaming headsets, with...

CVP Analysis (9pts): The Ood Sphere, Ltd. produces and sells a single product, gaming headsets, with the following information:

Per unit:

Per month:

Selling price

$79.00

Variable manufacturing costs:

   Direct Materials

$18.00

   Direct Labor

$7.75

   Variable Factory OH

$6.00

Fixed manufacturing costs (Fixed OH)

$28,350

Variable selling and administrative costs

$10.50

Fixed selling and administrative costs

$17,180

The company sells 1,500 units during the month ended February 28th.

  1. (3pts)  Prepare a contribution margin income statement for February at the current sales volume of 1,500 units.
  1. (1pt)  How many headsets need to be sold per month in order to break even (round your answer up to the nearest whole unit).
  1. (1pt). How many headsets need to be sold per month in order to earn a target profit of $20,000 (round your answer up to the nearest whole unit).
  1. (4pts total) The production manager at The Ood Sphere is considering purchasing a new machine to use at its main factory where production occurs.  As a result, the manager predicts the following impact on production, price, and costs if they purchase this machine for the upcoming month ended March 31st:
  • Fixed Factory OH costs will increase by $4,000 per month.  
  • Direct labor costs will decrease by $1.50 per unit.  
  • The selling price will be decreased by $0.25 per unit.
  • Sales volume will increase from its current level of 1,500 units to 1,650 units.  
  1. (3pts)  Prepare a contribution margin income statement for March assuming all of these changes are implemented.

  1. (1pt)  How many headsets need to be sold in March in order to break even assuming all of these changes are implemented  (round your answer up to the nearest whole unit)?

Solutions

Expert Solution

1.

2.

3.

4.

5.

ekkarill92 answered 10 months ago
Next > < Previous

Related Solutions

6. CVP Analysis (9pts): The Ood Sphere, Ltd. produces and sells a single product, gaming headsets,...
6. CVP Analysis (9pts): The Ood Sphere, Ltd. produces and sells a single product, gaming headsets, with the following information: Per unit: Per month: Selling price $79.00 Variable manufacturing costs:    Direct Materials $18.00    Direct Labor $7.75    Variable Factory OH $6.00 Fixed manufacturing costs (Fixed OH) $28,350 Variable selling and administrative costs $10.50 Fixed selling and administrative costs $17,180 The company sells 1,500 units during the month ended February 28th. (3pts) Prepare a contribution margin income statement for...
CVP Analysis; Break-even point (2pts): Diagram, Inc., produces and sells a single product whose selling price...
CVP Analysis; Break-even point (2pts): Diagram, Inc., produces and sells a single product whose selling price is $240.00 per unit and whose variable expense is $72.00 per unit. The company's fixed expense is $372,960 per month. Determine the monthly break-even in: a)     unit sales volume b)     total dollar sales CVP Analysis; Target Profit (2pts): L. Gott Corporation produces and sells a single product. Data concerning that product appear below: Selling price per unit $ 230.00 Variable expense per unit $...
CVP Analysis with Taxes (Single Product). Riviera Incorporated produces flat panel televisions. The company has annual...
CVP Analysis with Taxes (Single Product). Riviera Incorporated produces flat panel televisions. The company has annual fixed costs totaling $10,000,000 and variable costs of $600 per unit. Each unit of product is sold for $1,000. Riviera expects to sell 70,000 units this year (this is the same data as the previous problem). Assume a tax rate of 30 percent. Required: Round all calculations to the nearest dollar and nearest unit where appropriate. a. How many units must be sold to...
Task 1: Standard Costing & Variance Analysis Kita Ltd, produces a single product in one of...
Task 1: Standard Costing & Variance Analysis Kita Ltd, produces a single product in one of its factory. For control and measurement purposes, a standard costing system was recently introduced and is now in operation. The standards set for the month of May were as follows:   Production and sales                                                   16,000 units Selling price (per unit)                                                  RM140 Materials: Material XX                                                                     6 kilos per unit at RM12.25 per kilo Material YY                                                                     3 kilos per unit at RM3.20 per kilo...
Question 15 ABC Ltd produces a single product with a single grade of labour. It sales...
Question 15 ABC Ltd produces a single product with a single grade of labour. It sales budget and finished goods inventory budget for period 3 are as follows: Sales                                                    700 units Opening stock of finished goods      50 units Closing stock of finished goods         70 units The goods are inspected only when production work is completed, and it is budgeted that 105 of finished work will be scrapped. The standard direct labour hour required in producing the product is 3 hours....
Question 15 ABC Ltd produces a single product with a single grade of labour. It sales...
Question 15 ABC Ltd produces a single product with a single grade of labour. It sales budget and finished goods inventory budget for period 3 are as follows: Sales                                                    700 units Opening stock of finished goods      50 units Closing stock of finished goods         70 units The goods are inspected only when production work is completed, and it is budgeted that 105 of finished work will be scrapped. The standard direct labour hour required in producing the product is 3 hours....
CVP: Colourful Candy Ltd produces a brightly coloured range of large lollipops. Each lollipop sells for...
CVP: Colourful Candy Ltd produces a brightly coloured range of large lollipops. Each lollipop sells for $5.60. Variable unit costs are as follows: Colouring Agents $0.70 Sugar $0.35 Corn Syrup $1.85 Other ingredients $0.34 Packaging $0.76 Lollipop Moulds and Sticks $0.20 Fixed overhead cost is $32,300 per year. Fixed selling and administrative costs are $12,500 per year. Colourful Candy sold 35,000 lollipops last year. The tax rate is 30%. Required: a) What is the contribution margin per unit for a...
Zumpano inc. produces and sells a single product. The selling price of the product is $170.00...
Zumpano inc. produces and sells a single product. The selling price of the product is $170.00 per unit and its variable cost is $73.10 per unit. The fixed expenses is $125,001 per month The break-even in monthly dollar sales is closest to:
The Timbrick Company produces and sells a single product. The production of this product requires 15...
The Timbrick Company produces and sells a single product. The production of this product requires 15 liters of direct material for each unit produced. Timbrick has an inventory policy which sets a target ending inventory of finished goods equal to 15% of next months expected unit sales. The target ending inventory for direct materials is 30% of the materials needed for production for next month. The budgeted cost of direct materials is $0.40 per liter. Normally, Timbrick pays the suppliers...
Gaming Corp. produces and sells the “Game-Box 720”, a digital gaming device. The market selling price...
Gaming Corp. produces and sells the “Game-Box 720”, a digital gaming device. The market selling price is $190 per unit.The firm’s regular costs are as follows: Fixed production costs $1,000 Variable production costs per unit $50 Variable marketing costs per unit sold in the normal market $10 The firm’s production facilities provide it with the capacity to produce a total of 15 units of product per period. Given current market conditions, the firm expects to produce and sell 10 units.As...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT