All Terrain Tires manufactures three different off-road ATV tires: Model A, Model B, and Model C. Plenty of market demand exists for all models. The table below reports the prices and costs per unit of each product: Model A Model B Model C Selling price $ ? $50 $55 Direct materials costs $5 $5 $5 Direct labor costs ($15 per labor hour) $15 $15 $30 Variable support costs ($3 per machine hour) $3 $6 $9 Fixed support costs $10 $10 $10 Assuming that machine hours are limited (i.e., this is the constrained resource), at what price does Model A become the most profitable model to produce?

All Terrain Tires manufactures three different off-road ATV tires: Model A, Model B, and Model C. Plenty of market demand exists for all models. The table below reports the prices and costs per unit of each product: Model A Model B Model C Selling price $ ? $50 $55 Direct materials costs $5 $5 $5 Direct labor costs ($15 per labor hour) $15 $15 $30 Variable support costs ($3 per machine hour) $3 $6 $9 Fixed support costs $10 $10 $10 Assuming that machine hours are limited (i.e., this is the constrained resource), at what price does Model A become the most profitable model to produce?

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter7: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 58P: Polaris Inc. manufactures two types of metal stampings for the automobile industry: door handles and...

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All Terrain Tires manufactures three different off-road ATV tires: Model A, Model B, and Model C. Plenty of market demand exists for all models. The table below reports the prices and costs per unit of each product: Model A Model B Model C Selling price $22 $30 $35 Direct materials costs $2 $5 $8 Direct labor costs ($15 per labor hour) $15 $10 $14 Variable support costs ($3 per machine hour) $3 $8 $6 Fixed support costs $100 $100 $100 Assuming that the company is constrained on machine hours, and all units produced can be sold, then which model is the most profitable? Group of answer choices Model B Model C Model A Model B and C are equally profitable.
All Terrain Tires manufactures three different off-road ATV tires: Model A, Model B, and Model C. Plenty of market demand exists for all models. The table below reports the prices and costs per unit of each product: Selling price Direct materials cost Direct labor costs ($15 per labor hour) Variable support costs ($4 per machine hour) Fixed support costs Select one: O a. Any price above $42 O b. Any price above $56 O c. Any price above $66 d. None of these options are correct. e. Any price above $28 Model A Model B Model C $? $66 $60 $6 $6 $18 $36 $8 $12 $12 $12 Assuming that machine hours are limited (i.e., this is the constrained resource), at what price does Model A become the most profitable model to produce? O O $6 $18 $4 $12
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Answer the following questions using the information below: Braun's Brakes manufactures three different product lines, Model X, Model Y, and Model Z. Considerable market demand exists for all models. The following per unit data apply: Model X Model Y Model Z Selling price $50 $60 $70 Direct materials 6 6 6 Direct labor ($12 per hour) 12 12 24 Variable support costs ($4 per machine-hour) 4 88 Fixed support costs 10 10 10 If there is a machine breakdown, which model is the most profitable to produce? Model X Model Y Model Z Models Y and Z
Polaris Inc. manufactures two types of metal stampings for the automobile industry: door handles and trim kits. Fixed cost equals 146,000. Each door handle sells for 12 and has variable cost of 9; each trim kit sells for 8 and has variable cost of 5. Required: 1. What are the contribution margin per unit and the contribution margin ratio for door handles and for trim kits? 2. If Polaris sells 20,000 door handles and 40,000 trim kits, what is the operating income? 3. How many door handles and how many trim kits must be sold for Polaris to break even? 4. CONCEPTUAL CONNECTION Assume that Polaris has the opportunity to rearrange its plant to produce only trim kits. If this is done, fixed costs will decrease by 35,000, and 70,000 trim kits can be produced and sold. Is this a good idea? Explain.
Outdoor Luggage, Incorporated, makes high-end hard-sided luggage for sports equipment. Data concerning three of the company's most popular models appear below: Selling price per unit Variable cost per unit Required 1 Complete this question by entering your answers in the tabs below. Required 2 Plastic injection molding machine processing time required to produce one unit Pounds of plastic pellets per unit Required: 1. If the total time available on the plastic injection molding machine is the constraint, how much contribution margin per minute of the constrained resource is earned by each product? 2. Which product offers the most profitable use of the plastic injection molding machine? 3. If a severe shortage of plastic pellets required the company to cut back production so much that its new constraint has become the total available pounds of plastic pellets, how much contribution margin per pound of the constrained resource is earned by each product? 4. Which product offers the most…
What would the unit selling price be ?
What would the unit selling price be ? General accounting
Mountain Technical manufactures mountaineering tents. It has fixed costs of $8,280,000. Mountain Technical's unit cost and sales data is shown as follows: Ranier Shasta Whitney Model Model Model Unit sales price $300 $400 $500 Unit variable costs $260 $340 $380 Units sold 48,000 72,000 40,000 What is the weighted-average unit contribution margin? A. $220 B. $57 C. $73 D. $69 Determine the number of units of each model that the company must sell to break even: Group of answer choices A. Ranier - 36,000 units; Shasta - 54,000 units; Whitney –…
Pierson Pet Products produces two models of dog beds: Basic and Custom. Price, cost and expected sales volume data for the two models are as follows: Basic $ 19.00 $ 12.00 36,000 Custom $ 54.00 $ 33.00 24,000 Selling price per bed Variable cost per bed Expected sales (beds) The total fixed costs for the company are $396,900. Required: a. What is the anticipated level of profits for the expected sales volumes? b. Assuming that the expected product mix applies regardless of total sales, compute the break-even volume. Note: Do not round Intermediate calculations. c. If the product sales mix were to change to three Basic beds for each Custom bed, what would be the new break-even volume? Note: Do not round intermediate calculations.
Manatoah Manufacturing produces 3 models of window air conditioners: model 101, model 201, and model 301. The sales price and variable costs for these three models are as follows: Product Sales Priceper Unit Variable Costper Unit Model 101 $275 $185 Model 201 355 220 Model 301 405 240 The current product mix is 4:3:2. The three models share total fixed costs of $328,500. A. Calculate the sales price per composite unit. Sales price $fill in the blank 363349fb9022017_1 per composite unit B. What is the contribution margin per composite unit? Contribution margin $fill in the blank 363349fb9022017_2 per composite unit C. Calculate Manatoah’s break-even point in both dollars and units. Break-even point in dollars $fill in the blank 363349fb9022017_3 Break-even point in units fill in the blank 363349fb9022017_4 units D. Using an income statement format, prove that this is the break-even point. If an amount is zero, enter "0".…
SportsHaven’s garden department produces bags of mulch. Fixed cost is $17,300. Each bag sells for 3.21 with units cost of $1.48. How much bags of mulch must be sold to breakeven? Use the breakeven worksheet, press [2nd] [BRKEVN]

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	Model A	Model B	Model C
Selling price	$ ?	$50	$55
Direct materials costs	$5	$5	$5
Direct labor costs ($15 per labor hour)	$15	$15	$30
Variable support costs ($3 per machine hour)	$3	$6	$9
Fixed support costs	$10	$10	$10