Hello, I have the following question. D&R Corp. has annual revenues of $284,000, an average contribution margin of 35%, and fixed expenses of $100,500. A. Management is considering adding a new product to the company's product line. The new item will have $8.6 of variable costs per unit. Calculate the selling price that will be required if this product is not to affect the average contribution margin ratio. (I got $13.23 per unit). B. If the new product adds an additional $31,300 to D&R's fixed expenses, how many units of the new product must be sold at the price calculated in part A to break-even on the new product? (Do not round immediate calculations). C. If 28,800 units of the new product could be sold at a price of $13.8 per unit, and the company's other business did not change, calculate D&R's total operating income and average contribution margin ratio. (Round your intermediate calculations to 2 decimal places. Round average contribution margin ratio to 2 decimal places). Thanks.
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Hello,
I have the following question.
D&R Corp. has annual revenues of $284,000, an average contribution margin of 35%, and fixed expenses of $100,500.
A. Management is considering adding a new product to the company's product line. The new item will have $8.6 of variable costs per unit. Calculate the selling price that will be required if this product is not to affect the average contribution margin ratio. (I got $13.23 per unit).
B. If the new product adds an additional $31,300 to D&R's fixed expenses, how many units of the new product must be sold at the price calculated in part A to break-even on the new product? (Do not round immediate calculations).
C. If 28,800 units of the new product could be sold at a price of $13.8 per unit, and the company's other business did not change, calculate D&R's total operating income and average contribution margin ratio. (Round your intermediate calculations to 2 decimal places. Round average contribution margin ratio to 2 decimal places).
Thanks.
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