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0 E 12 13 14 16 18 Cost-Volume-Profit Wakky Company sells widgets for $60 each. The variable cost per widget is $48.60 and the total fixed cost is $639,100 widgets. Management is considering the following changes: annually. Current sales volume is 70,000 79 20 Alternative #1: Lease a new packaging machine for $20,000 annually which will increase fixed cost but reduce variable cost by $1.20 per widget. 21 22 Alternative #2: Increase selling price by 8% to help offset an expected 30% increase in fixed cost. 23 24 Alternative #3: Reduce fixed cost by 50% by moving to a lower rent location. This would cause variable cost to increase by 10%. REQUIRED: Considering the current situation and each possible alternative separately from each other, do the following: 1. Complete the grid below for the current level of production and each of the alternatives. For each alternative refer to the current data (round to 3 decimal places if necessary). Current Unit selling price Unit variable cost Unit contribution margin Contribution margin ratio Fixed costs Operating income Alternative #1 Alternative #2 Alternative #3 Cost-V

0 E 12 13 14 16 18 Cost-Volume-Profit Wakky Company sells widgets for $60 each. The variable cost per widget is $48.60 and the total fixed cost is $639,100 widgets. Management is considering the following changes: annually. Current sales volume is 70,000 79 20 Alternative #1: Lease a new packaging machine for $20,000 annually which will increase fixed cost but reduce variable cost by $1.20 per widget. 21 22 Alternative #2: Increase selling price by 8% to help offset an expected 30% increase in fixed cost. 23 24 Alternative #3: Reduce fixed cost by 50% by moving to a lower rent location. This would cause variable cost to increase by 10%. REQUIRED: Considering the current situation and each possible alternative separately from each other, do the following: 1. Complete the grid below for the current level of production and each of the alternatives. For each alternative refer to the current data (round to 3 decimal places if necessary). Current Unit selling price Unit variable cost Unit contribution margin Contribution margin ratio Fixed costs Operating income Alternative #1 Alternative #2 Alternative #3 Cost-V

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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I just need help with the chart and can you show me how you got the solutions as well. Thanks
3 4 6 7 8 9 10 12 13 14 15 16 17 18 76 Cost-Volume-Profit Wakky Company sells widgets for $60 each. The variable cost per widget is $48.60 and the total fixed cost is $639,100 annually. Current sales volume is 70,000 widgets. Management is considering the following changes: 20 TOTH Alternative #1: Lease a new packaging machine for $20,000 annually which will increase fixed cost but reduce variable cost by $1.20 per widget. 2012 Bag Alternative #2: Increase selling price by 8% to help offset an expected 30% increase in fixed cost. 124 EN126 20 Alternative #3: Reduce fixed cost by 50% by moving to a lower rent location. This would cause variable cost to increase by 10%. REQUIRED: Considering the current situation and each possible alternative separately from each other, do the following: 1. Complete the grid below for the current level of production and each of the alternatives. For each alternative refer to the current data (round to 3 decimal places if necessary). Current Unit selling price Unit variable cost Unit contribution margin Contribution margin ratio Fixed costs Operating income Alternative #1 Alternative #2 Alternative #3 2. Respond to the questions below in the space provided (round answers to a whole number). Cost-Vo F
Transcribed Image Text:3 4 6 7 8 9 10 12 13 14 15 16 17 18 76 Cost-Volume-Profit Wakky Company sells widgets for $60 each. The variable cost per widget is $48.60 and the total fixed cost is $639,100 annually. Current sales volume is 70,000 widgets. Management is considering the following changes: 20 TOTH Alternative #1: Lease a new packaging machine for $20,000 annually which will increase fixed cost but reduce variable cost by $1.20 per widget. 2012 Bag Alternative #2: Increase selling price by 8% to help offset an expected 30% increase in fixed cost. 124 EN126 20 Alternative #3: Reduce fixed cost by 50% by moving to a lower rent location. This would cause variable cost to increase by 10%. REQUIRED: Considering the current situation and each possible alternative separately from each other, do the following: 1. Complete the grid below for the current level of production and each of the alternatives. For each alternative refer to the current data (round to 3 decimal places if necessary). Current Unit selling price Unit variable cost Unit contribution margin Contribution margin ratio Fixed costs Operating income Alternative #1 Alternative #2 Alternative #3 2. Respond to the questions below in the space provided (round answers to a whole number). Cost-Vo F
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