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

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

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter7: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 58P: Polaris Inc. manufactures two types of metal stampings for the automobile industry: door handles and...

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Bramble Corporation makes two products, footballs and baseballs. Additional information follows: Footballs Baseballs Units 2,000 2,500 Sales $144,000 $60,000 Variable costs 57,600 33,000 Fixed costs 24,000 12,600 Net income $62,400 $14,400 Yards of leather per unit 1.25 0.30 Net income per unit $31.20 $5.76 Unit contribution margin $43.20 $10.80 Assume that Bramble is able to order an additional 4,000 yards of leather and wishes to maximize its net income. Of the additional units it produces, at least 800 of each product are necessary for sales. How many units of each must be produced? (Round contribution margin per yard to 2 decimal places, e.g. 52.75 and final answers to O decimal places, e.g. 5,275.) Units produce Footballs Baseballs
Sandhill Company makes three models of tasers. Information on the three products is given below. Tingler Shocker Stunner Sales $296,000 $504,000 $200,000 Variable expenses 151,700 207,900 138,200 Contribution margin 144,300 296,100 61,800 Fixed expenses 117,800 231,800 95,000 Net income $26,500 $64,300 $(33,200) Fixed expenses consist of $300,000 of common costs allocated to the three products based on relative sales, as well as direct fixed expenses unique to each model of $29,000 (Tingler), $80,600 (Shocker), and $35,000 (Stunner). The common costs will be incurred regardless of how many models are produced. The direct fixed expenses would be eliminated if that model is phased out. James Watt, an executive with the company, feels the Stunner line should be discontinued to increase the company's net income. (a) Compute current net income for Sandhill Company. Net income A
Ivanhoe Company makes three models of tasers. Information on the three products is given below. Tingler Shocker Stunner Sales $296,000 $504,000 $200,000 Variable expenses 151,100 203,300 138,600 Contribution margin 144,900 300,700 61,400 Fixed expenses 116,616 228,184 93,900 Net income $28,284 $72,516 $(32,500) Fixed expenses consist of $296,000 of common costs allocated to the three products based on relative sales, as well as direct fixed expenses unique to each model of $29,000 (Tingler), $79,000 (Shocker), and $34,700 (Stunner). The common costs will be incurred regardless of how many models are produced. The direct fixed expenses would be eliminated if that model is phased out.James Watt, an executive with the company, feels the Stunner line should be discontinued to increase the company’s net income.(a)Compute current net income for Ivanhoe Company. Net income $ (b)Compute net income by product line…
CVP single product; comprehensiveBeantown Baseball Company makes baseballs that sell for $13 per two-pack. Current annual production and sales are 960,000 baseballs. Costs for each baseball are as follows:Direct material$2.00Direct labor1.25Variable overhead0.50Variable selling expenses0.25Total variable cost$4.00Total fixed overhead$1,250,000a. Calculate the unit contribution margin in dollars and the contribution margin ratio for the company.Note: Round percentage to two decimal places (for example, round 32.5555% to 32.56%).Unit contribution margin in dollars $AnswerContribution margin ratio Answer%\\n
Paxton Company can produce a component of its product that incurs the following costs per unit: direct materials, $10.50; direct labor, $14.50, and incremental overhead $3.50. An outside supplier has offered to sell the product to Paxton for $37.00. Compute the net incremental cost or savings of buying the component. Multiple Choice $3.50 cost per unit $8 5 savings per unit. $0 cost or savings per unit $8.50 cost per unit. $3.50 savings per unit
The following product Costs are available for Haworth Company on the production of chairs: direct materials, $15,500; direct labor, $22.000; manufacturing overhead, $16.500; selling expenses, $6,900; and administrative expenses, $15,200. What are the prime costs? What are the conversion costs? What is the total product cost? What is the total period cost? If 7,750 equivalent units are produced, what is the equivalent material cost per unit? If 22,000 equivalent units are produced, what is the equivalent conversion cost per unit?
Polaris Inc. manufactures two types of metal stampings for the automobile industry: door handles and trim kits. Fixed cost equals 146,000. Each door handle sells for 12 and has variable cost of 9; each trim kit sells for 8 and has variable cost of 5. Required: 1. What are the contribution margin per unit and the contribution margin ratio for door handles and for trim kits? 2. If Polaris sells 20,000 door handles and 40,000 trim kits, what is the operating income? 3. How many door handles and how many trim kits must be sold for Polaris to break even? 4. CONCEPTUAL CONNECTION Assume that Polaris has the opportunity to rearrange its plant to produce only trim kits. If this is done, fixed costs will decrease by 35,000, and 70,000 trim kits can be produced and sold. Is this a good idea? Explain.
Compute
Curiumber Enterprises is considering manufacturing a new product. It projects the cost of direct materials and rent for a range or output as follows. Output in Units 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 Rent Cost 11.000 $5,290 5,290 8,464 8,464 8,464 8,464. 8,464 8.464 10.580 10,000 10,580 10.580 Direct Materials $4,200 7,200 7,200 9,600. 12,000 14,400 16.800 19,200 30.999 37,030 46.552
YZ Manufacturing Company produces two products, Y and Z. The following information is presented for both products: Y Quantity sold 2,500 7,500 Selling price per unit $50 $20 Variable cost per unit 5 20 Total fixed costs are $150,000. What is the breakeven point in units of both Y and Z respectively? NI
Riverside Incorporated makes one model of wooden canoe. Partial information for it follows: Number of Canoes Produced and Sold Total costs Variable costs Fixed costs Total costs: Cost per unit Variable cost per unit. Fixed cost per unit Total cost per unit Unit contribution margin Contribution margin ratio 400 Scenario 1 Raises Sales Price to $760 per Canoe $ 52,000 180,000 $ 232,000 $ 130.00 450.00 $580.00 600 $ 78,000 180,000 $ 258,000 Contribution Margin Income Statement $130.00 300.00 $ 430.00 Riverside sells its canoes for $660 each. Next year Riverside expects to sell 1,000 canoes. Required: Complete the Riverside's contribution margin income statement for each independent scenarlo. Assuming each scenario is of Riverside's original data. Note: Round your unit contribution margin and contribution margin ratio to 2 decimal places (i.e. 0.1234 should be ente 12.34 %) and all other answers to the nearest dollar amount. Scenario 2 Increase Sales Price and Variable Cost per Unit by 10…
Riverside Inc. makes one model of wooden canoe. Partial information for it follows: Number of Canoes Produced and Sold Total costs Variable costs Fixed costs 550 750 900 $110,000 99,000 $150,000 $180,000 99,000 $209,000 $249,000 $279,000 99,000 Total costs Cost per unit Variable cost per unit $ 200.00 $ 200.00 132.00 $ 332.00 $ 200.00 Fixed cost per unit 180.00 110.00 Total cost per unit $ 380.00 310.00 Riverside sells its canoes for $460 each. Next year Riverside expects to sell 1,000 canoes. Required: Complete the Riverside's contribution margin income statement for each independent scenario. Assuming each scenario is a variation of Riverside's original data. (Round your unit contribution margin and contribution margin ratio to 2 decimal places (i.e. 1234 should be entered as 12.34%) and all other answers to the nearest dollar amount.) Scenario 2 Increase Scenario 1 Raises Scenario 3 Sales Price and Variable Cost per Unit by 10 Percent Sales Price to $560 Decrease Fixed per Canoe…