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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%

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
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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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%
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