a) What is the contribution marginper hour of processing for eachproduct?b) What is the optimal mix ofproducts in units if there are noconstraints on demand?Socks:Gloves:c) What is the total contributionmargin earned for the optimal mixof products?Socks (units):Gloves (units): Abbey & Aliyah Inc. manufacturewool socks and gloves foroutdoor sports. Both productsmust go through a special processwhich makes the wool waterproof. The processing departmentwhich does this has a capacity ofonly 1,280 hours per month. Thefollowing information is availableabout the products manufactured:ProductSelling priceper unitVariable costsper unitTime requiredto processone unit (inhours)Socks Gloves$30 $40122 hrs163 hrs

The contribution margin per unit is calculated as the difference between selling price and variable…

hat is ne cc contr margin per hour of processing for each product? b) What is the optimal mix of products in units if there are no constraints on demand? Socks: Gloves: c) What is the total contribution margin earned for the optimal mix of products?

hat is ne cc contr margin per hour of processing for each product? b) What is the optimal mix of products in units if there are no constraints on demand? Socks: Gloves: c) What is the total contribution margin earned for the optimal mix of products?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Contribution margin per unit is the amount by which a products unit selling price exceeds its…

A: Contribution margin:- Contribution margin Indicates how much money is left after variable costs are…

Q: The break-even point in unitsis calculated as (fill in the blank) divided by the Contribution Margin…

A: The objective of the question is to identify the correct term that is used to calculate the…

Q: On the CVP graph, the next unit sold will increase total cost by an amount equal to the Select one:…

A: CVP (Cost Volume Profit) graph shows the connection between the costs incurred in production and…

Q: What is the difference between absorption costing and variable costing? 2. Distinguish between…

A: Cost accounting: It is a part of managerial accounting and is used to record total cost of…

Q: a) Complete the following table: [Calculate Marginal Physical Product, Average Fixed Costs, Average…

A: A cost is an expense incurred in the production or sale of a product or the preparation of an asset…

Q: Before a company reaches the breakeven point Select one: a. The fixed cost is equal to zero b. The…

A: Contribution is calculated as Sales less variable costs. Sale price is the price at which the…

Q: On the CVP graph, the next unit sold will increase total cost by an amnount equal to the Select one:…

A: CVP analysis refers to the Cost Volume Profit Analysis. In the cost volume Profit analysis the main…

Q: 5. Which of the following best describes a fixed cost? A. Increase proportionately with output. B.…

A: "Since you have asked multiple questions, we will solve first question for you. If you want any…

Q: Which of the following is not an assumption made when performing cost-volume-profit analysis?…

A: Cost-volume-profit (CVP) analysis is a financial management tool used to analyze the relationship…

Q: Cost, revenue, and profit are in dollars and x is the number of units. If the total profit function…

A: Hello. Since your question has multiple parts, and the first part has incomplete information we will…

Q: Winslow Inc. manufactures and sells three types of shoes. The income statements prepared under the…

A: Operating income is the amount of money earned by the entity from its business operations. It is the…

Q: Customer life-cycle costs: Select one: a. Are the replacement costs of using a product or service.…

A: Cost Accounting system A perpetual inventory accounting system, the cost accounting system is…

Q: The trial balance of ABC at December 31, 2023, and the data needed for the month-end adjustments…

A: Financial Statements include income statements, statements of retained earnings and balance…

Q: For each model, compute the contribution margin per unit. B. For each model, compute the…

A: A. Contribution margin per unit = Sales revenue - Variable costs Calculate contribution margin per…

Q: (1)Use the graph to answer the question that follows. Based on the chart above, if the product…

A: Marginal revenue is referred as the revenue, which usually leads from the sale of an one additional…

Q: None

A: The marginal product (MP) is the additional output produced by one more unit of input. The formula…

Q: A company produces and sells a product. The company has found that the costto produce x units of the…

A: The objective of the question is to find the number of units the company should produce and sell to…

Q: For costs that vary with production level in the short term, the cost driver will be: a. Service…

A: Solution- Under Activity Based Costing, the costs are classified as short term variable costs and…

Q: With multiple products in a value stream, unit cost will increase if Group of answer choices more…

A: A value stream is a series of steps that are taken to deliver a product or service to the end…

Q: 2. Consider the production functions given below: a. Suppose that the production function faced by a…

A: The objective of the question is to analyze the production function of a bread producer, determine…

Q: In determining the number of Break Even (B-E) units to sell in order to obtain the amount of…

A: The break even sales are the sales where business earns no profit no loss during the period.

Q: revenues equal total fixed costs e given answers on margin equals total costs revenues equal total…

A: A CVP analysis is used to determine the sales volume required to achieve a specified profit level.…

Q: Contribution margin is a function of both the selling price of a product, the variable costs of the…

A: Contribution margin Selling price - variable cost of the product. Therefore any change in either of…

Q: The suitable cost unit for electricity is Kilowatt Hours Cost centers are a quantitative unit of…

A: Electricity is measured in terms of kilowatt hours for costing purposes.

Q: Question 4) “When the number of units in work in process and finished goods inventories increase,…

A: Absorption costing and variable costing are two different types of forms of costing.

Q: Bates Company plans to add a new item to its line of consumer product offerings. Two possible…

A: Differential revenue is the difference in products sales price. The sale price can be calculated by…

Q: Cost-volume-profit (CVP) analysis with multiple products assumes that sales will continue at the…

A: The objective of the question is to identify which of the given options will most likely change if…

Q: Which of the following statements is true? I. Under the absorption costing method, a company can…

A: Absorption costing is a method of costing in which all manufacturing costs both variable and fixed…

Q: Which of the following best describes a fixed cost? A. Increase proportionately with output. B.…

A: “Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Whirly has the following information for 2015. They sell Flying Carpets. Sales Contribution Margin…

A: The break even sales are the sales where business earns no profit no loss during the period. The…

Q: All else being equal, what happens to the unit contribution margin and the contribution margin ratio…

A: Contribution margin is the margin of profits of any enterprise which is essentially a function of…

Q: Which TWO of the following statements about life-cycle costing are true? Specific product models…

A: Life cycle costing is a technique of cost accumulation of a product over its life cycle. Now these…

Q: Suppose you have a product for which you will only place a single order with your supplier. If 5)…

A: There is a situation where we can place one order only, and the expected profit will depend on…

Q: 1. One way management considers their costs is as average costs. Under this approach, managers can…

Q: t is known that a new fee will increase if the order made by the customer increases. Based on this…

A: Under ABC system, the costs are divided on the grounds of various types of cost drivers utilized.…

Q: Which of these costs would be the most difficult to estimate when you know exactly how many units…

A: When you know exactly how many units will be produced, the cost of materials used in the product…

Q: Contribution margin is sales less Star

A: Variable cost can be defined as the cost which is incurred on the production of goods. The value of…

Question

a) What is the contribution margin
per hour of processing for each
product?
b) What is the optimal mix of
products in units if there are no
constraints on demand?
Socks:
Gloves:
c) What is the total contribution
margin earned for the optimal mix
of products?
Socks (units):
Gloves (units):

Abbey & Aliyah Inc. manufacture
wool socks and gloves for
outdoor sports. Both products
must go through a special process
which makes the wool water
proof. The processing department
which does this has a capacity of
only 1,280 hours per month. The
following information is available
about the products manufactured:
Product
Selling price
per unit
Variable costs
per unit
Time required
to process
one unit (in
hours)
Socks Gloves
$30 $40
12
2 hrs
16
3 hrs

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Introduction

VIEW

Step 2: Solution

VIEW

Solution

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Contribution margin per unit is the amount by which a product's unit selling price exceeds its variable cost per unit True False
The table below shows cost data for producing different amounts of cleaning products. Use the given information to answer the questions below. Quantity Total Cost Variable Cost Marginal Cost Average Variable Cost Average Total Cost in $ in $ in $ in $ in $ 344 0 354 10 384 40 444 100 534 190 644 300 0 5 10 15 20 25 A What is the profit (loss) at that level of production? 2 6 12 18 22 How many cleaning products would a competitive firm produce if the market price was $18? 2.00 4.00 6.67 9.50 12.00 70.80 38.40 29.60 26.70 25.76
Kingsland Metalworks manufactures custom chairs and ships them to customers using UPS. Assume stable shipping prices. Which two terms describe the cost of shipping these chairs?a. Variable cost and product costb. Variable cost and period costc. Fixed cost and product costd. Fixed cost and period cost
please solve with full work
Given the mixed cost function y = $6.50x + $3,000. What does the $6.50 represent? a.Total cost per unit of the cost driver b.The fixed cost per unit c.The slope of the cost function d.Total fixed costs
2. CVP analysis allows management to determine the relative profitability of a product by * Keeping fixed costs to an absolute minimum. Highlighting potential bottlenecks in the production process. Assigning costs to a product in a manner that maximizes the contribution margin. Determining the contribution margin O per unit and projected profits at various levels of production.
Is this correct?
PLEASE USE THIS TIME TO ANSWER THIS. AYAW NA PAGHULAT UG DEADLINE, TOMORROW IS ANOTHER DAY. PLEASE DEFINE AND GIVE THE FORMULA OF THE FOLLOWING (IF THERE IS ANY): PLEASE ANSWER HERE DIRECTLY 1. absorption costing 2. activity bases (drivers) 3. break-even polnt 4. contributlon margin 5. contributlon margin ratlo 6. cost behavlor 7. cost-volume-profit analysls 8. cost-volume-profit chart
Please correct answer and don't use hand rating
Dozier Company produced and sold 1,000 units during its first month of operations. It reported the following costs and expenses for the month: $ 74,000 $ 37,500 Direct materials Direct labor $ 17,000 29,500 Variable manufacturing overhead Fixed manufacturing overhead Total manufacturing overhead Variable selling expense Fixed selling expense Total selling expense Variable administrative expense Fixed administrative expense Total administrative expense $ 46,500 $ 13,000 20,000 $ 33,000 $ 4,500 26,000 $ 30,500
In detail discuss what are the advantages and disadvantages of using FIFO for process costing. In periods when costs are increasing how will FIFO affect reported net income? What about in periods of declining costs? Explain.
If a company chooses a price to charge for its product by adding up all the expenses necessary to make the product and then adding in a profit, this is known as: a) Target Costing Ob) Skimming Pricing Oc) Cost-Based Pricing Od) Odd-Even Pricing Oe) Penetration Pricing