Chip Company produces three products, Kin, Ike, and Bix. Each product uses the same direct material. Kin uses 3.2 pounds of thematerial, Ike uses 3.3 pounds of the material, and Bix uses 5.9 pounds of the material. Selling price per unit and variable costs per unitof each product follow.Selling price per unitVariable costs per unitKin$ 159.44106.00Contribution margin per poundIke$ 107.3980.00(a) Compute contribution margin per pound of material for each product. (b) If demand is limited, list the three products in the order inwhich management should produce and meet demand.Bix$ 211.59152.00Product Contribution MarginOrder in which management should produce and meet demand:KinIkeBix

The contribution margin is calculated as the difference between the sales and variable costs. The…

Answered: Chip Company produces three products,…

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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Bridgeport Company manufactures and sells two products. Relevant per-unit data concerning each product follow: Selling price Variable costs Machine hours Product Basic $43.00 $19.00 0.50 Show Transcribed Text Calculate the contribution margin per machine hour for each product. Question Part Score Contribution margin per machine hour $ Basic eTextbook and Media Deluxe Deluxe $52.00 $23.30 Bridgeport should manufacture the Basic 0.70 If 1,800 additional machine hours are available, which product should Bridgeport manufacture? - Show Transcribed Text Total contribution margin $ Basic Prepare an analysis showing the total contribution margin if 1,800 additional hours are: (1) Divided equally between the products. product. $ Deluxe Total contribution margin $ (2) Allocated entirely to the product identified in part (b).
Chip Company produces three products, Kin, Ike, and Bix. Each product uses the same direct material. Kin uses 3.9 pounds of the material, Ike uses 3.1 pounds of the material, and Bix uses 5.5 pounds of the material. Selling price per unit and variable costs per unit of each product follow. Kin Ike Bix Selling price per unit $ 152.67 $ 118.66 $ 207.55 Variable costs per unit 93.00 92.00 141.00 (a) Compute contribution margin per pound of material for each product. (b) If demand is limited, lis
Chip Company produces three products, Kin, Ike, and Bix. Each product uses the same direct material. Kin uses 4.5 pounds of the material, Ike uses 4.1 pounds of the material, and Bix uses 6.2 pounds of the material. Selling price per unit and variable costs per unit of each product follow. Selling price per unit Variable costs per unit Kin $ 173.10 102.00 Ike $ 118.18 78.00 Bix $ 204.34 138.00 (a) Compute contribution margin per pound of material for each product. (b) If demand is limited, list the three products in the order in which management should produce and meet demand. Contribution margin per pound Product Contribution Margin Kin Ike Bix Order in which management should produce and meet demand:
Skull Company makes snowboards and uses the total cost method in setting product price. Its costs for producing 19,500 units follow. The company targets a 10.0% markup on total cost. Variable Costs per Unit Direct materials Direct labor Overhead Selling, general and administrative Fixed Costs (total) Overhead Selling, general and administrative $ 119 44 39 8 1. Total cost per unit 2. Markup per unit 3. Selling price per unit $ 480,000 456,000 1. Compute the total cost per unit if 19,500 units are produced. 2. Compute the dollar markup per unit. 3. Compute the selling price per unit. (For all requirements, round your final answers to the nearest dollar amounts.)
Chip Company produces three products, Kin, Ike, and Bix. Each product uses the same direct material. Kin uses 4.8 pounds of the material, Ike uses 2.5 pounds of the material, and Bix uses 6.3 pounds of the material. Selling price per unit and variable costs per unit of each product follow.. Selling price per unit Variable costs per unit Kin $ 165.24 87.00 Contribution margin per pound Ike $ 104.00 82.00 (a) Compute contribution margin per pound of material for each product. (b) If demand is limited, list the three products in the order in which management should produce and meet demand. Bix $ 222.82 151.00 Product Contribution Margin Order in which management should produce and meet demand: Kin Ike Bix
Smith Company can produce two types of carpet cleaners, Brighter and Cleaner. Data on these two products are as follows: Sales volume in units Brighter 400 Cleaner 600 Unit sales price Unit variable cost $ 1,000 200 $ 1,000 700 The number of machine hours to produce one unit of Brighter is 1, while the number of machine hours for each unit of Cleaner is 2. Total fixed costs for the manufacture of both products are $290,000. Required: 1. Determine the breakeven point in total units for Smith Company, based on the assumption that the sales mix (on the basis of relative sales volume in units) remains constant. Use the weighted-average contribution margin approach. 2. At this breakeven level, how many units of each product must be sold? Due to rounding, the total breakeven units for Requirement 2 may differ slightly than in Requirement 1. 3. Using the Indirect approach, what is the overall breakeven point in sales dollars? Use the breakeven units computed in Requirement 1. Complete this…
Barlow Company manufactures three products-A, B, and C. The selling price, variable costs, and contribution margin for one unit of each product follow: Product A B C $ 240 Selling price Variable expenses: $160 $ 270 Direct materials 16 80 32 Other variable expenses 108 90 148 Total variable expenses 124 170 180 Contribution margin $ 36 $ 100 $ 60 Contribution margin ratio 23% 37% 25% The same raw material is used in all three products. Barlow Company has only 6,000 pounds of raw material on hand and will not be able to obtain any more of it for several weeks due to a strike in its supplier's plant. Management is trying to decide which product(s) to concentrate on next week in filling its backlog of orders. The material costs $8 per pound. Required: 1. Calculate the contribution margin per pound of the constraining resource for each product. 2. Assuming that Barlow has unlimited demand for each of its three products, what is the maximum contribution margin the company can earn when…
Benoit Company produces three products-A, B, and C. Data concerning the three products follow (per unit): Product B $ 62.00 Selling price Variable expenses: Direct materials Other variable expenses Total variable expenses Contribution margin Contribution margin ratio A $ 80.00 24.00 24.00 48.00 $ 32.00 Required 1 Required 2 40% Required 3 18.00 25.40 43.40 $18.60 30% с $81.00 The company estimates that it can sell 800 units of each product per month. The same raw material is used in each product. The material costs $3 per pound with a maximum of 5,000 pounds available each month. 9.00 43.65 52.65 $28.35 Required: 1. Calculate the contribution margin per pound of the constraining resource for each product. 2. Which orders would you advise the company to accept first, those for A, B, or C? Which orders second? Third? 3. What is the maximum contribution margin that the company can earn per month if it makes optimal use of its 5,000 pounds of materials? 35% Complete this question by…
Chip Company produces three products, Kin, Ike, and Bix. Each product uses the same direct material. Kin uses 3.4 pounds of the material, Ike uses 2.3 pounds of the material, and Bix uses 5.8 pounds of the material. Selling price per unit and variable costs per unit of each product follow. Selling price per unit Variable costs per unit Kin $ 157.02 105.00 Ike $ 105.16 84.00 Вix $ 219.18 149.00 (a) Compute contribution margin per pound of material for each product. (b) If demand is limited, list the three products in the order in which management should produce and meet demand. Product Contribution Margin Kin Ike Bix Contribution margin per pound Order in which management should produce and meet demand:
Lindstrom Company produces two fountain pen models. Information about its products follows: Product A Product B Sales revenue Less: Variable costs Contribution margin Total units sold Lindstrom's fixed costs total $86,500. Required: $ 76,600 41,400 $ 46,000 5,000 $ 123,400 52,800 $ 91,000 5,000 1. Determine Lindstrom's weighted-average unit contribution margin and weighted-average contribution margin ratio. 2. Calculate Lindstrom's break-even point in units and in sales revenue. 3. Calculate the number of units that Lindstrom must sell to earn a $150,000 profit. 4. Calculate Lindstrom's margin of safety (in units and sales dollars) and margin of safety as a percentage of sales based on the sales data provided in the table above. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Calculate the number of units that Lindstrom must sell to earn a $150,000 profit. Note: Do not round your intermediate calculations. Round your answer…
Morris Industries manufactures and sells three products (AA, BB, and CC). The sales price and unit variable cost for the three products are as follows: Product Sales Priceper Unit Variable Costper Unit AA $45 $30 BB 35 10 CC 35 5 Their sales mix is reflected as a ratio of 5:3:2. Annual fixed costs shared by the three products are $189,000 per year. A. What are total variable costs for Morris with their current product mix? Total variable costs $fill in the blank b16d34fd6fb7fb3_1 B. Calculate the number of units of each product that will need to be sold in order for Morris to break even. Number ofUnits per Product AA fill in the blank BB fill in the blank CC fill in the blank C. What is their break-even point in sales dollars? Break-even point in sales $fill in the blank
Edge Company produces two models of its product with the same machine. The machine has a capacity of 154 hours per month. The following information is available. Selling price per unit Variable costs per unit Contribution margin per unit Machine hours per unit Maximum unit sales per month Required: Contribution margin per unit 노래 Contribution margin per machine hour Standard Hours dedicated to the production of each product Units produced for most profitable sales mix Contribution margin per unit Total contribution margin $ 140 55 1. Determine the contribution margin per machine hour for each model. Product Contribution Margin Hours dedicated to the production of each product Units produced for most profitable sales mix Contribution margin per unit Total contribution margin $85 1 hour 500 units Deluxe $ 170 102 $ 68 2 hours 200 units Standard 2. How many units of each model should the company produce? How much total contribution margin does this mix produce per month? Standard Deluxe…

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