5 Revenue mix, new and upgrade customers. Zapo 1-2-3 is a top-selling spreadsheet product. Zapo is about to release Version 5.0. It groups its customers into groups new customers and upgrade customers (those who previously purchased Zapo 1-2-3 Version 4.0 or earlier). Although the same physical product is provided to each customer group, sizable differences exist in their selling prices and variable marketing costs: Selling price Variable cost: Manufacturing Marketing New Customers $25 65 $210 90 a. New 50% / upgrade 50% b. New 90% / upgrade 10% Upgrade Customers $120 $25 15 40 The fixed costs of Zapo 5.0 are $14,000,000. The planned revenue mix in units is 60% new customers and 40% upgrade customers. REQUIRED 1. What is the Zapo 1-2-3 Version 5.0 breakeven point in units, assuming that the planned 60/40 mix is maintained? 2. If the mix is maintained, what is the operating income when 200,000 units are sold? 3. Show how the breakeven point in units changes with the following customer mixes:

5 Revenue mix, new and upgrade customers. Zapo 1-2-3 is a top-selling spreadsheet product. Zapo is about to release Version 5.0. It groups its customers into groups new customers and upgrade customers (those who previously purchased Zapo 1-2-3 Version 4.0 or earlier). Although the same physical product is provided to each customer group, sizable differences exist in their selling prices and variable marketing costs: Selling price Variable cost: Manufacturing Marketing New Customers $25 65 $210 90 a. New 50% / upgrade 50% b. New 90% / upgrade 10% Upgrade Customers $120 $25 15 40 The fixed costs of Zapo 5.0 are $14,000,000. The planned revenue mix in units is 60% new customers and 40% upgrade customers. REQUIRED 1. What is the Zapo 1-2-3 Version 5.0 breakeven point in units, assuming that the planned 60/40 mix is maintained? 2. If the mix is maintained, what is the operating income when 200,000 units are sold? 3. Show how the breakeven point in units changes with the following customer mixes:

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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1/1 - CengageNOWv2 | Online teachin X enow.com/ilrn/takeAssignment/takeAssignmentMa.ao?invoker=&takeAssignmentSessionLocator=&inprogress=false Party Supply is trying to decide whether or not to continue its costume segment. The information shown is available for Party Supply's business segments. Assume that neither the Direct fixed costs nor the Allocated common fixed costs may be eliminated, but will be allocated to the two remaining segments. Party Floral Costumes Supplies Decorations Sales $160,000 $109,000 $209,000 Variable costs 83,000 51,000 120,000 Contribution margin $77,000 $58,000 $89,000 Direct fixed costs 50,000 20,000 25,000 Allocated common fixed costs 31,000 25,000 31,000 $(4,000) $13,000 $32,000 Net income If costumes are dropped, whahchange will occur to profit? Profit will by $ Next
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The Cycle Division of Sheffield Company has the following unit data related to its most recent cycle, the Roadbuster. Selling price Variable cost of goods sold Body frame Other variable costs Contribution margin (a) $330 990 $2,420 Presently, the Cycle Division buys its body frames from an outside supplier. However Sheffield has another division, FrameBody, that makes body frames for other cycle companies. The Cycle Division believes that FrameBody's product is suitable for its new Roadbuster cycle. Presently, FrameBody sells its frames for $385 per frame. The variable cost for FrameBody is $291. The Cycle Division is willing to pay $299 to purchase the frames from FrameBody. 1,320 (2) Effect on the income of FrameBody $1,100 Assume that FrameBody has excess capacity and is able to meet all of the Cycle Division's needs. If the Cycle Division buys 1,100 frames from FrameBody, determine the following: (Enter negative amounts using either a negative sign preceding the number e.g. -45 or…
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Assuming that there are no market constraints atall, which product line would maximize profits forthe firm? Configure the solver parameters to address thequestion taking into consideration machine and laborcapacity constraints ONLY. Insert a new comment andprepare a brief analysis of the results. (Hint: whichresource is the constraining resource?) Southern Frozen Foods Proforma Monthly Segment Analysis Sauces Soups Casseroles Unused Capacity Total Sales volume (cases) 200 300 500 1,000 Revenue $6,000 $30.00 $12,600 $42.00 $25,000 $50.00 $43,600 Variable costs 3,200 16.00 6,600 22.00 14,000 28.00 23,800 Contribution margin $2,800 $14.00 $6,000 $20.00 $11,000 $22.00 $19,800 Fixed costs: Machine-time-related 420 1,050 2,625 2,905 7,000…
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