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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 27,300 additional Sun Sound 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 Sun Sound Ear Bling Headphones Headphones $38.60 $60.20 (21.60) (33.70) $17.00 $26.50 (12.00) $14.50 (5.40) $9.10 Unit volume increase x Contribution margin per unit $ (7.70) Prepare an analysis indicating the increase or decrease in total profitability if 27,300 additional Sun Sound and 30,000 additional Ear Bling headphones are produced and sold, assuming that there is sufficient capacity for the additional production. Round your per unit answers to two decimal place. Head Pops Inc. Analysis $9.30 (3.50) $5.80 Sun Sound Headphones Ear Bling Headphones 8,596,800 X

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 27,300 additional Sun Sound 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 Sun Sound Ear Bling Headphones Headphones $38.60 $60.20 (21.60) (33.70) $17.00 $26.50 (12.00) $14.50 (5.40) $9.10 Unit volume increase x Contribution margin per unit $ (7.70) Prepare an analysis indicating the increase or decrease in total profitability if 27,300 additional Sun Sound and 30,000 additional Ear Bling headphones are produced and sold, assuming that there is sufficient capacity for the additional production. Round your per unit answers to two decimal place. Head Pops Inc. Analysis $9.30 (3.50) $5.80 Sun Sound Headphones Ear Bling Headphones 8,596,800 X

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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 27,300 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 Sun Sound Ear Bling Headphones Headphones $38.60 (21.60) $17.00 Unit volume increase x Contribution margin per unit $ Increase in profitability $ (7.70) $9.30 (3.50) $5.80 Prepare an analysis indicating the increase or decrease in total profitability if 27,300 additional Sun Sound and 30,000 additional Ear Bling headphones are produced and sold, assuming that there is sufficient capacity for the additional production. Round your per unit answers to two decimal place. Head Pops Inc. Analysis $60.20 (33.70) $26.50 (12.00) $14.50 (5.40) $9.10 Sun Sound Headphones Ear Bling Headphones 8,596,800 X $ $
Transcribed Image Text: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 27,300 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 Sun Sound Ear Bling Headphones Headphones $38.60 (21.60) $17.00 Unit volume increase x Contribution margin per unit $ Increase in profitability $ (7.70) $9.30 (3.50) $5.80 Prepare an analysis indicating the increase or decrease in total profitability if 27,300 additional Sun Sound and 30,000 additional Ear Bling headphones are produced and sold, assuming that there is sufficient capacity for the additional production. Round your per unit answers to two decimal place. Head Pops Inc. Analysis $60.20 (33.70) $26.50 (12.00) $14.50 (5.40) $9.10 Sun Sound Headphones Ear Bling Headphones 8,596,800 X $ $
Prepare an analysis indicating the increase or decrease in total profitability if 27,300 additional Sun Sound and 30,000 additional Ear Bling headphones are produced and sold, assuming that there is sufficient capacity for the additional production. Round your per unit answers to two decimal place. Unit volume increase x Contribution margin per unit $ Increase in profitability $ Feedback Head Pops Inc. Analysis Sun Sound Headphones Ear Bling Headphones 8,596,800 X $ $ ✓ Check My Work Fixed costs should be excluded when determining the incremental income for operations, because they will not be affected by the decision.
Transcribed Image Text:Prepare an analysis indicating the increase or decrease in total profitability if 27,300 additional Sun Sound and 30,000 additional Ear Bling headphones are produced and sold, assuming that there is sufficient capacity for the additional production. Round your per unit answers to two decimal place. Unit volume increase x Contribution margin per unit $ Increase in profitability $ Feedback Head Pops Inc. Analysis Sun Sound Headphones Ear Bling Headphones 8,596,800 X $ $ ✓ Check My Work Fixed costs should be excluded when determining the incremental income for operations, because they will not be affected by the decision.
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