Gallery Corporation makes two products, footballs and baseballs. Additional information follows: Units Sales Variable costs Footballs 2,000 Baseballs $60,000 2,500 $25,000 24,000 13,750 Fixed costs 10,000 5,250 Net income $26,000 $6,000 Yards of leather per unit 1.25 0.30 Profit per unit $13.00 Contribution margin per unit $18.00 $2.40 $4.50 Assume that Gallery is able to order an additional 2,500 yards of leather and wishes to maximize its income. Of the additional units it produces, at least 500 of each product are necessary for sales. How many units of each must be produced? Units produce Footballs Baseballs 8000

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Chapter7: Cost-volume-profit Analysis
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Gallery Corporation makes two products, footballs and baseballs. Additional information follows:
Units
Sales
Variable costs
Footballs
2,000
Baseballs
$60,000
2,500
$25,000
24,000
13,750
Fixed costs
10,000
5,250
Net income
$26,000
$6,000
Yards of leather per unit
1.25
0.30
Profit per unit
$13.00
Contribution margin per unit
$18.00
$2.40
$4.50
Assume that Gallery is able to order an additional 2,500 yards of leather and wishes to maximize its income. Of the additional units it produces, at least 500 of
each product are necessary for sales.
How many units of each must be produced?
Units produce
Footballs
Baseballs
8000
Transcribed Image Text:Gallery Corporation makes two products, footballs and baseballs. Additional information follows: Units Sales Variable costs Footballs 2,000 Baseballs $60,000 2,500 $25,000 24,000 13,750 Fixed costs 10,000 5,250 Net income $26,000 $6,000 Yards of leather per unit 1.25 0.30 Profit per unit $13.00 Contribution margin per unit $18.00 $2.40 $4.50 Assume that Gallery is able to order an additional 2,500 yards of leather and wishes to maximize its income. Of the additional units it produces, at least 500 of each product are necessary for sales. How many units of each must be produced? Units produce Footballs Baseballs 8000
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