2. WonderFood is a multi-product company that makes three types of cereal. The company has fixed costs of $100, 000 per annum. Compute the following: (a) the separate contribution margin ratio for each product (b) the weighted-average contribution margin ratio of the company as a whole (c)the breakeven distribution of products. The following table shows the sales price, variable cost per unit and units sold of each product: Type 1 $5 Type 2 $7.50 Type 3 $9 Variable Cost per Unit Price per Unit Unit Sold $10 2000 $13 1500 $15 1300

2. WonderFood is a multi-product company that makes three types of cereal. The company has fixed costs of $100, 000 per annum. Compute the following: (a) the separate contribution margin ratio for each product (b) the weighted-average contribution margin ratio of the company as a whole (c)the breakeven distribution of products. The following table shows the sales price, variable cost per unit and units sold of each product: Type 1 $5 Type 2 $7.50 Type 3 $9 Variable Cost per Unit Price per Unit Unit Sold $10 2000 $13 1500 $15 1300

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Sunn Company manufactures a single product that sells for $215 per unit and whose variable costs are $172 per unit. The company's annual fixed costs are $597,700. (a) Compute the company's contribution margin per unit. Contribution margin (b) Compute the company's contribution margin ratio. Numerator: (c) Compute the company's break-even point in units. 1 1 Numerator: 1 1 Numerator: Denominator: Denominator: (d) Compute the company's break-even point in dollars of sales. 1 1 Denominator: = = II II = Contribution Margin Ratio Contribution margin ratio Break-Even Units Break-even units Break-Even Dollars Break-even dollars
Most businesses sell several products at varying prices. The products often have different unit variable costs. Thus, the total profit and the breakeven point depend on the proportions in which the products are sold. Sales mix is the relative contribution of sales among various products sold by a firm. Assume that the sales of Jordan Incorporated for a typical year are as follows: Product Units Sold Sales Mix A 18,320 80% B 4,580 20 Total 22,900 100% Assume the following unit selling prices and unit variable costs: Product Selling Price Variable Cost Contribution Margin A $ 90 $ 75 $ 15 B 150 110 40 Fixed costs are $420,000 per year. Assume that the sales mix, expressed in terms of relative physical units sold, is constant as sales volume changes. --Assume the original facts except that now fixed costs are expected to be $42,000 higher than originally planned. How does this expected increase in fixed costs affect the breakeven point in units? How does…
Required information [The following information applies to the questions displayed below.] Henna Company produces and sells two products, Carvings and Mementos. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company sold 53,000 units of each product. Income statements for each product follow. Sales Variable costs Contribution margin Fixed costs Income 3. Assume that the company expects sales of each product to increase to 67,000 units next year with no change in unit selling price. Prepare a contribution margin income statement for the next year (as shown above with columns for each of the two products). (Round "per unit" answers to 2 decimal places.) Sales Variable cost Contribution margin Fixed costs Income (loss) Mementos $ 863,900 Carvings $ 863,900 604,730 259, 170 116,170 86,390 777,510 634,510 $ 143,000 $ 143,000 HENNA COMPANY Contribution Margin Income Statement Carvings Units 67,000…
Morris Industries manufactures and sells three products (AA, BB, and CC). The sales price and unit variable cost for the three products are as follows: Product Sales Priceper Unit Variable Costper Unit AA $45 $30 BB 35 10 CC 35 5 Their sales mix is reflected as a ratio of 5:3:2. Annual fixed costs shared by the three products are $189,000 per year. A. What are total variable costs for Morris with their current product mix? Total variable costs $fill in the blank b16d34fd6fb7fb3_1 B. Calculate the number of units of each product that will need to be sold in order for Morris to break even. Number ofUnits per Product AA fill in the blank BB fill in the blank CC fill in the blank C. What is their break-even point in sales dollars? Break-even point in sales $fill in the blank
Jenna Corporation sells a single product. Management has provided the following data for two levels of monthly sales volume. The company sells the product for $172.50 per unit. Sales Volume in Units 4,000 5,000 Cost of Sales (COS) $307,600 $384,500 Selling, General & Administrative Costs (SG&A) $321,200 $337,000 Selling Price Per Unit $173 Total costs for these cost categories and may include both Fixed and Variable costs. HINT: See high-low analysis. 1. Calculate the total contribution margin when 4,300 units are sold. 2. What is the breakeven point in Sales dollars if Advertising (a fixed SG&A cost) is increased by $40,000? Please show calculations.
Accel Corp makes two products: C and D. The following data have been summarized (Click the icon to view the data.) Accel Corp desires a 28% target gross profit after covering all product costs. Considering the total product costs assigned to the Products C and D, what would Accel have to charge the customer to achieve that gross profit? Round to two decimal places Begin by selecting the formula to compute the amount that the company should charge for each product Direct labor cost per unit Direct materials cost per unit Indirect manufacturing cost per unit Product cost as a percentage of sales price Target gross profit percentage Total product cost per unit Get more help. Clear all Show work Required sales price per unit Check answer
Krispies Ltd manufactures and sells three products which have the following revenue and costs per unit: Snap Crackle Pop R R Selling price per unit 15 20 12 Variable cost per unit 10 13 6 Fixed cost per unit Unit fixed costs are based on the following sales volumes: Snap -– 15 000 units Crackle – 12 000 units Pop – 30 000 units Required: Calculate the aggregate break-even units and sales for Krispies Ltd. Round to two decimals.
MAS 1 Company sells 10,000 units of its products to SM Supermarket. Its selling price is P 50 per unit. The details of its costs are as follows: Direct Materials P 6 per unit Direct Labor P 10 per unit Variable Factory Overhead P 4 per unit Fixed Factory Overhead P 150,000 Variable Expenses P 5 per unit Fixed Expenses P 50,000 Assume each questions as independent assumptions: 6. Margin of safety in units 7. Margin of safety ratio 8. Net Profit 9. Contribution margin in pesos
[The following information applies to the questions displayed below.] Henna Company produces and sells two products, Carvings and Mementos. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company sold 42,000 units of each product. Income statements for each product follow. Sales Variable costs Contribution margin Fixed costs Income Problem 18-4A (Algo) Part 1 Required: 1. Compute the break-even point in dollar sales for each product. (Enter CM ratlo as percentage rounded to 2 decimal places.) Contribution Margin Ratio Numerator: Break-Even Point in Dollars Numerator: Contribution Margin Ratio Break-Even Point in Dollars 1 1 1 1 Carvings $ 747,600 523,320 224,280 Mementos $ 747,600 149,520 598,080 108,280 482,080 $ 116,000 $ 116,000 1 PRODUCT CARVINGS Denominator: Denominator: PRODUCT MEMENTOS = IL 11 Contribution margin ratio Break-even point in dollars Contribution margin ratio Break-even point…
Use this information for Carter Co. to answer the question that follows. Carter Co. sells two products, arks and bins. Last year, Carter sold 14,000 units of arks and 56,000 units of bins. Related data are as follows: Product Unit Selling Price Unit Variable Cost Unit Contribution Margin Arks Bins $120 80 $80 60 $40 20 Assuming that last year's fixed costs totaled $960,000, what was Carter Co.'s break-even point in sales units? a. 12,000 units O b. 28.000 units O c. 35,000 units O d. 40.000 units 13
Response containing written narrative, figures, and charts. Milano Co. manufactures and sells three products: product 1, product 2, and product 3. Their unit selling prices are product 1, $40; product 2, $30; and product 3, $20. The per unit variable costs to manufacture and sell these products are product 1, $30; product 2, $15; and product 3, $8. Their sales mix is reflected in a ratio of 6:4:2. Annual fixed costs shared by all three products are $270,000. One type of raw material has been used to manufacture products 1 and 2. The company has developed a new material of equal quality for less cost. The new material would reduce variable costs per unit as follows: product 1 by $10 and product 2 by $5. However, the new material requires new equipment, which will increase annual fixed costs by $50,000. If the company continues to use the old material, determine its break-even point in both sales units and sales dollars of each individual product. If the company uses the new…
Mienfoo Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels of monthly sales volume: Sales volume (units) 9,500 11,490 Cost of sales ₱ 731,500 ₱ 884,730 Selling and administrative costs ₱ 696,000 ₱ 739,780 The company sells the product for ₱134.00 per unit. The best estimate of the TOTAL CONTRIBUTION MARGIN when 10,070 units are sold is ₱_________________