Cheyenne Chance Co. sells computers and video game systems. The business is divided into two divisions along product lines.Variable costing income statements for the current year are presented below:ComputersVG SystemsTotalSales$ 704,000$ 176,000$ 880.000Variable costs352.000105,600457,600Contribution margin$ 352,000$ 70.400422,400Fixed costs160,320Net income$ 262,080Determine the sales mix and contribution margin ratio for each division.ComputersVG SystemsSales mix%Contribution margin ratio%Calculate the company's weighted-average contribution margin ratio.Weighted-average contribution margin ratioCalculate the company's break-even point in sales dollars.Break-even pointDetermine the sales level, in dollars, for each division at the break-even point.ComputersVG SystemsBreak-even point24

Here in this question we are required to determine sales mix, Contribution margin ratio per…

Answered: Cheyenne Chance Co. sells computers and…

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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The accounting firm of JN Corporation has been studying the sales requirements of the Shayan Bottling Company. In the course of the study, the managing partner submits the following estimated data: Sales Rs. 900,000 Fixed marketing expenses Rs. 71,000 Direct materials 206,200 Variable marketing expenses 80,000 Direct Labor 165,200 Fixed administrative expenses 9,500 FOH 171,896 Variable administrative expenses 4,000 Variable FOH 102,600 Calculate Contribution Margin Ratio for JN Corporation.
Shown below is a segmented income statement for Hickory Company's three wooden flooring product lines: Strip Plank Parquet Total $394,000 $201,000 $285,000 $880,000 235,000 130,000 260,000 625,000 $159,000 $71,000 $25,000 $255,000 Sales revenue Less: Variable expenses Contribution margin Less direct fixed expenses: Machine rent Supervision Depreciation Segment margin Hickory's management is deciding whether to keep or drop the parquet product line. Hickory's parquet flooring product line has a contribution margin of $25,000 (sales of $285,000 less total variable costs of $260,000). All variable costs are relevant. Relevant fixed costs associated with this line include 70% of parquet's machine rent and all of parquet's supervision salaries. In addition, assume that dropping the parquet product line would reduce sales of the strip line by 15% and sales of the plank line by 10%. All other information remains the same. (7,000) (28,000) (26,000) (61,000) (15,000) (10,000) (5,000) (30,000)…
Solve this questions with steps. The subject is Managerial Accounting.
San Jose Company operates a Manufacturing Division and an Assembly Division. Both divisions are evaluated as profit centers. Assembly buys components from Manufacturing and assembles them for sale. Manufacturing sells many components to third parties in addition to Assembly. Selected data from the two operations follow. Manufacturing Assembly Capacity (units) 421,000 221,000 Sales pricea $ 442 $ 1,405 Variable costsb $ 265 $ 522 Fixed costs $ 40,210,000 $ 24,210,000 a For Manufacturing, this is the price to third parties. b For Assembly, this does not include the transfer price paid to Manufacturing. Required: a. Current production levels in Manufacturing are 221,000 units. Assembly requests an additional 61,000 units to produce a special order. What transfer price would you recommend? b. Suppose Manufacturing is operating at full capacity. What transfer price would you recommend? c. Suppose Manufacturing is operating at 390,500 units. What…
Royal Lawncare Company produces and sells two packaged products-Weedban and Greengrow. Revenue and cost information relating to the products follow: Selling price per unit Variable expenses per unit Traceable fixed expenses per year Weedban $ 12,00 $ 2.80 $ 129,000 Product Sales Variable expenses Contribution margin Traceable fixed expenses Product line segment margin Common fixed expenses not traceable to products Net operating income Greengrow $.33.00 $12.00 $ 41,000 Last year the company produced and sold 41,000 units of Weedban and 22.500 units of Greengrow. Its annual common fixed expenses are $100,000. Required: Prepare a contribution format income statement segmented by product lines. Product Line Total Weedban Greengrow Company $ 5,289,500 $4,502,000 $ 607,500 3,270,000 143,500 270,000 2,019,500 4,448,500 427,500 2,019,500 $4,448,500 $ 427,500 $ 2,019,500
Carol Components operates a Production Division and a Packaging Division. Both divisions are evaluated as profit centers. Packaging buys components from Production and assembles them for sale. Production sells many components to third parties in addition to Packaging. Selected data from the two operations follow: Capacity (units) Sales pricea Variable costs b Fixed costs Production 50,600 $ 252 $ 108 $ 30,000,000 a For Production, this is the price to third parties. b For Packaging, this does not include the transfer price paid to Production. Packaging 25,300 $ 792 $ 300 $ 18,000,000 Suppose Production is located in Country A with a tax rate of 30 percent and Distribution in Country B with a tax rate of 10 percent. All other facts remain the same. a. Optimal transfer price b. Transfer price c. Transfer price Required: a. Current output in Production is 25,300 units. Packaging requests an additional 5,960 units to produce a special order. What transfer price would you recommend? b.…
Shamrock Co. manufactures three types of computer desks. The income statement for the three products and the whole company is shown below: Sales Variable costs Fixed costs Total costs Operating income (loss) Product A Product B Product C $110,000 $135,000 75,000 125,000 $88,000 46,000 25,200 71,200 $16,800 18,000 93,000 $17,000 18,000 143,000 $(8,000) Total $333,000 246,000 61,200 307.200 $25,800 The company produces 1.000 units of each product. The company's capacity is 17,000 machine hours. The machine hours for each product are 7 hours for Product A, 5 hours for Product B, and 5 hours for Product C. Fixed costs are allocated based on machine hours.
Lucido Products markets two computer games: Claimjumper and Makeover. A contribution format income statement for a recent month for the two games appears below: Sales Variable expenses Contribution margin Fixed expenses Net operating income Claimjumper $57,600 38,400 $ 19, 200 Required: 1. What is the overall contribution margin (CM) ratio for the company? 2. What is the company's overall break-even point in dollar sales? 3. Prepare a contribution format income statement at the company's break-even point that shows the appropriate levels of sales for the two products. Required 1 Required 2 Required 3 Complete this question by entering your answers in the tabs below. Sales Variable expenses Contribution margin Prepare a contribution format income statement at the company's break-even point that shows the appropriate levels of sales for the two products. (Do not round intermediate calculations. Round your answers to the nearest dollar amount.) Engberg Company Contribution Income…
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A1
Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) Total $ 4,070,000 1,273,000 2,797,000 2,220,000 $ 577,000 Financial (disadvantage) I Department Hardware $ 3,060,000 870,000 2,190,000 1,370,000 $ 820,000 Required: What is the financial advantage (disadvantage) of discontinuing the Linens Department? A study indicates that $372,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue even if the Linens Department is dropped. In addition, the elimination of the Linens Department will result in a 18% decrease in the sales of the Hardware Department. Linens $ 1,010,000 403,000 607,000 850,000 $ (243,000)
Crane Trivia Co. manufactures and sells two trivia products, the Square Trivia Game and the Round Trivia Game. Last quarter's operating profits, by product, and for the company as a whole, were as follows: Square Round Total Sales revenue $11,000 $6,860 $17,860 Variable expenses 5,000 2,910 7,910 Contribution margin 6,000 3,950 9,950 Fixed expenses 2,750 4,200 6,950 Operating income $ 3,250 $(250) $ 3,000 Forty percent of the Round Game's fixed costs could have been avoided if the game had not been produced or sold. If the Round Game had been discontinued before the last quarter, what would operating income have been for the company as a whole? Operating income without round $

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