Head-First Company plans to sell 4,200 bicycle helmets at $67 each in the coming year. Product costs include:Direct materials per helmet$29Direct labor per helmet8.00Variable factory overhead per helmet5.00Total fixed factory overhead19,000Variable selling expense is a commission of $4.00 per helmet, fixed selling and administrative expense totals $29,900.Required:1. Calculate the total variable cost per unit2. Calculate the total fixed expense for the year.3. Prepare a contribution margin income statement for Head-First Company for the coming year

The contribution margin income statement is the income statement format which determines the…

Answered: Head-First Company plans to sell 4,200…

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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Subject: acounting
Flint Corporation makes a commercial-grade cooking griddle. The following information is available for Flint Corporation's anticipated annual volume of 26,500 units. Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses $8 Fixed selling and administrative expenses The company uses a 40% markup percentage on total cost. (a) Your answer is correct. Compute the total unit cost. Total cost per unit $ (b) eTextbook and Media Per Unit $14 $6 $10 Compute the target selling price. Target selling price $ 55 Total $291,500 $159,000 Attempts: 1 of 5 used
Variable Cost Ratio, Contribution Margin Ratio Chillmax Company plans to sell 3,500 pairs of shoes at $60 each in the coming year. Unit variable cost is $21 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Fixed factory overhead is $30,000 and fixed selling and administrative expense is $48,000. Required: 1. Calculate the variable cost ratio. % 2. Calculate the contribution margin ratio. 3. Prepare a contribution margin income statement based on the budgeted figures for next year. In a column next to the income statement, show the percentages based on sales for sales, total variable cost, and total contribution margin. Enter amounts as positive numbers. Chillmax Company Contribution Margin Income Statement For the Coming Year Percent of Sales Sales Total variable cost Total contribution margin Total fixed cost Operating income
Head-First Company plans to sell 4,400 bicycle helmets at $84 each in the coming year. Unit variable cost is $45 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals $60,450 (includes fixed factory overhead and fixed selling and administrative expense). Required: 1. Calculate the break-even number of helmets. 2. Check your answer by preparing a contribution margin income statement based on the break-even units.
Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit Annual Production 16,000 units 53,000 units Hubs Sprockets Additional information about the company follows: a. Hubs require $34 in direct materials per unit, and Sprockets require $13. b. The direct labor wage rate is $19 per hour. 0.80 0.40 c. Hubs require special equipment and are more complex to manufacture than Sprockets. d. The ABC system has the following activity cost pools: Activity Cost Pool (Activity Measure) Machine setups (number of setups) Special processing (machine-hours) General factory (organization-sustaining) Estimated Overhead Cost $ 26,910 $ 120,000 $ 330,800 Required: 1. Compute the activity rate for each activity cost pool. 2. Determine the unit product cost of each product according to the ABC system. Hubs 130 4,000 NA Activity Sprockets 104 0 ΝΑ Total 234 4,000 ΝΑ
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Assume that a company manufactures numerous component parts, one of which is called Part A. The company's absorption costing system indicates that it costs $23.00 to make one unit of Part A as shown below: Direct materials $ 10.00 Direct labor 6.00 Variable overhead 2.00 Fixed overhead 5.00 Total absorption cost per unit $ 23.00 The company is trying to decide between two alternatives: Alternative 1: Continue making 80,000 units of Part A per year using its existing equipment at the unit cost shown above. The equipment used to make this part does not wear out through use and it has no resale value. Alternative 2: Replace the existing equipment with a new piece of equipment that the company would rent for $150,000 per year. The new piece of equipment would be used to make 80,000 units per year and it would reduce Part A's direct labor cost per unit by 20% and its variable overhead per unit by 30%. The direct materials cost per unit will remain constant. What is the financial advantage…
Excellent Manufacturers Inc. has a current production level of 20,000 units per month. Unit costs at this level are: Direct materials $0.26 Direct labor 0.40 Variable overhead 0.16 Fixed overhead 0.21 Marketing − fixed 0.25 Marketing/distribution − variable 0.42 Current monthly sales are 18,000 units. Jax Company has contacted Excellent about purchasing 1,550 units at $2.00 each. Current sales would NOT be affected by the one−time−only special order, and variable marketing/distribution costs would NOT be incurred on the special order. What is Ratzlaff Company's change in operating profits if the special order is accepted?

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