Gardner Furniture Company produces two kinds of chairs: an oak model and a chestnut wood model. The Oak model sells for $60 and the chestnut wood model sells for $100. The variable expenses are as follows: Variable production costs per unit Variable selling & administrative expenses Per unit Oak $30 Oak $6 Chestnut $35 Chestnut $5 Expected sales in units next year are: 5,000 oak chair and 1,000 chestnut chairs. Fixed expenses are budgeted at $135,000 per year. The company's overall contribution margin ratio for the expected sales mix is: a. 40% b. 45% C. 50% d. 60%

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

Please do not give solution in image format thanku 

Gardner Furniture Company produces two kinds of chairs: an oak model and a chestnut wood model.
The Oak model sells for $60 and the chestnut wood model sells for $100. The variable expenses are as
follows:
Variable production costs per unit
Variable selling & administrative expenses
Perunit
Oak $30
C. 50%
d. 60%
T
Oak $6
Chestnut $35
Chestnut $5
Expected sales in units next year are: 5,000 oak chair and 1,000 chestnut chairs. Fixed expenses are
budgeted at $135,000 per year.
The company's overall contribution margin ratio for the expected sales mix is:
a. 40%
b. 45%
Transcribed Image Text:Gardner Furniture Company produces two kinds of chairs: an oak model and a chestnut wood model. The Oak model sells for $60 and the chestnut wood model sells for $100. The variable expenses are as follows: Variable production costs per unit Variable selling & administrative expenses Perunit Oak $30 C. 50% d. 60% T Oak $6 Chestnut $35 Chestnut $5 Expected sales in units next year are: 5,000 oak chair and 1,000 chestnut chairs. Fixed expenses are budgeted at $135,000 per year. The company's overall contribution margin ratio for the expected sales mix is: a. 40% b. 45%
Expert Solution
steps

Step by step

Solved in 3 steps

Blurred answer
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education