Comfort Ride manufactures seats for airplanes. The company has the capacity to produce 100,000 seats per year, but currently produces and sells 75,000 seats per year. The following informatiorelates to current production of seats:Sale price per unitVariable costs per unit:Manufacturing$400$230Marketing and administrative$60Total fixed costs:Manufacturing$790,000Marketing and administrative$210,000A. Increase by $49,000B. Increase by $60,000OC. Decrease by $49,000OD. Increase by $229,000

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Answered: Comfort Ride manufactures seats for…

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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Cabin Creek Company is considering adding a new line of kitchen cabinets. The company's accountant provided the following estimated data for these cabinets: Annual sales Selling price per unit Variable manufacturing costs per unit Variable selling costs per unit Incremental fixed costs per year: Manufacturing Selling Allocated common costs per year: 800 units $ 3,670 $ 1,670 $ 520 $ 492,400 $ 72,000 Manufacturing Selling and administrative $ 97,000 $ 129,000 If the kitchen cabinets are added as a new product line, the company expects that the contribution margin earned from selling its other products will decrease by $234,000 per year. Required: 1. What is the annual financial advantage (disadvantage) of adding the new line of kitchen cabinets? 2. What is the lowest selling price per unit that could be charged for the cabinets and still make it economically desirable for the company to add the new product line? Complete this question by entering your answers in the tabs below.
Cabin Creek Company is considering adding a new line of kitchen cabinets. The company's accountant provided the following estimated data for these cabinets: Annual sales Selling price per unit Variable manufacturing costs per unit Variable selling costs per unit Incremental fixed costs per year: Manufacturing Selling Allocated common costs per year: Manufacturing Selling and administrative 800 units $ 3,580 $ 1,580 $ 430 $ 483,400 $ 63,000 $ 88,000 $ 120,000 If the kitchen cabinets are added as a new product line, the company expects that the contribution margin earned from selling its other products will decrease by $216,000 per year. Required: 1. What is the annual financial advantage (disadvantage) of adding the new line of kitchen cabinets? 2. What is the lowest selling price per unit that could be charged for the cabinets and still make it economically desirable for the company to add the new product line? Complete this question by entering your answers in the tabs below. Required…
Linburgh Inc manufactures model airplanes and repair kits. The planes account for 80% of the sales mix, and the kits the remainder. The variable cost ratio for the planes is 85% and 70% for the kits. Fixed costs are $99,000. Compute the breakeven point in sales dollars. O $825,000 $550,000 $1,222,222 $293,333 hp
.
Lazer Tag manufactures computer parts within a relevant range of 50,000 to 100,000 units per year. Complete the following manufacturing cost schedule (a through j) for Lazer Tag. Fill in the following chart. Parts Produced 50,000 100,000 TOTAL COSTS: Variable $75,000 ? Fixed 50,000 ? Total ? ? COSTS PER UNIT: Variable ? ? Fixed ? ? Total ? ?
Sunn Company manufactures a single product that sells for $120 per unit and whose variable costs are $90 per unit. The company's annual fixed costs are $432.000 Management targets an annual income of $750,000. (1) Compute the unit sales to earn the target income. Numerator: 1 Denominator: (2) Compute the dollar sales to earn the target income.. Numerator: Denominator P M = Units to Achieve Target Units to achieve target Dollars to Achieve Target Dollars to achieve target
Bluegill Company sells 10,000 units at $400 per unit. Fixed costs are $200,000, and operating income is $1,800,000. Determine the following: a. Variable cost per unit $ b. Unit contribution margin $ per unit c. Contribution margin ratio %
Cabin Creek Company is considering adding a new line of kitchen cabinets. The company's accountant provided the following estimated data for these cabinets: Annual sales Selling price per unit Variable manufacturing costs per unit Variable selling costs per unit Incremental fixed costs per year: Manufacturing Selling r Allocated common costs per year: Manufacturing Selling and administrative 800 units $ 3,570 $ 1,570 $ 420 $ 482,400 $ 62,000 $ 87,000 $ 119,000 If the kitchen cabinets are added as a new product line, the company expects that the contribution margin earned from selling its of products will decrease by $214,000 per year. Required: 1. What is the annual financial advantage (disadvantage) of adding the new line of kitchen cabinets? 2. What is the lowest selling price per unit that could be charged for the cabinets and still make it economically desirable for the company to add the new product line? Complete this question by entering your answers in the tabs below. Required…
Funtastic Company has capacity for the production and sales of 30,000 units. Current production is 15,000 units and fixed costs are $16 per unit. If production decreases to 10,000 units, fixed costs will:
Comfort Ride manufactures seats for airplanes. The company has the capacity to produce 100,000 seats per year, but currently produces and sells 75,000 seats per year. The following informatic relates to current production of seats: Sale price per unit $400 Variable costs per unit: \table[[Manufacturing,$230
Gyro Company manufactures Products T and W and is operating at full capacity. Manufacturing Product W requires three times the number of machine hours required for Product T. Market research indicates that 1,000 additional units of Product W could be sold. The contribution margin by unit of product is as follows: Product T Product W Sales price $300 $325 Variable cost of goods sold (235) (250) Manufacturing margin $65 $75 Variable selling and administrative expenses (25) (10) Contribution margin $40 $65 Determine the increase or decrease in total contribution margin if 1,000 additional units of Product W are produced and sold. $ Decrease or Increase
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