Change in Sales Mix and Contribution Margin Head Pops Inc. manufactures two models of solar-powered, noise-canceling headphones: Sun Sound and Ear Bling models. The company is operating at less than full capacity. Market research indicates that 28,000 additional Sun Sound and 30,000 additional Ear Bling headphones could be sold. The operating income by unit of product is as follows: Sales price Variable cost of goods sold Manufacturing margin Variable selling and administrative expenses Contribution margin Fixed manufacturing costs Operating income Unit volume increase Contribution margin per unit $ crease in profitability Sun Sound Headphones $140.00 (78.40) $61.60 (28.00) $33.60 (14.00) $19.60 Head Pops Inc. Analysis Ear Bling Headphones $125.00 (70.00) $55.00 (25.00) $30.00 Prepare an analysis indicating the increase or decrease in total profitability if 28,000 additional Sun Sound and 30,000 additional Ear Bling headphones are produced an cold, ass that there is sufficie capacity for the additional production. Round your per unit answers to two decimal place. (12.50) $17.50 Sun Sound Headphones Ear Bling Headphones
Change in Sales Mix and Contribution Margin Head Pops Inc. manufactures two models of solar-powered, noise-canceling headphones: Sun Sound and Ear Bling models. The company is operating at less than full capacity. Market research indicates that 28,000 additional Sun Sound and 30,000 additional Ear Bling headphones could be sold. The operating income by unit of product is as follows: Sales price Variable cost of goods sold Manufacturing margin Variable selling and administrative expenses Contribution margin Fixed manufacturing costs Operating income Unit volume increase Contribution margin per unit $ crease in profitability Sun Sound Headphones $140.00 (78.40) $61.60 (28.00) $33.60 (14.00) $19.60 Head Pops Inc. Analysis Ear Bling Headphones $125.00 (70.00) $55.00 (25.00) $30.00 Prepare an analysis indicating the increase or decrease in total profitability if 28,000 additional Sun Sound and 30,000 additional Ear Bling headphones are produced an cold, ass that there is sufficie capacity for the additional production. Round your per unit answers to two decimal place. (12.50) $17.50 Sun Sound Headphones Ear Bling Headphones
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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