J&J Music Builders is a new business in the industry. Currently, they are producing and selling bamboo organs and flutes. Theyare planning to add guitar to their instruments. Based on the study conducted, the following are cost data related to the creation ofconventional and electric guitars:ConventionalElectricP1,800/unitDirect materialsP1,200/unit1,800/unit16,000Variable factory overhead 240/unitDirect labor450/unitFixed factory overhead47,970720/unitVariable selling expense120/unit80/unitCompute for the number of guitar sales which would give J&J the same operating income when they choose either of thealternative presented above.

At a particular level of activity, when costs of both the alternatives are same, then it will give…

Answered: Compute for the number of guitar sales…

Compute for the number of guitar sales which would give J&J the same operating income when they choose either of the alternative presented above.

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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Question

100%

J&J Music Builders is a new business in the industry. Currently, they are producing and selling bamboo organs and flutes. They
are planning to add guitar to their instruments. Based on the study conducted, the following are cost data related to the creation of
conventional and electric guitars:
Conventional
Electric
P1,800/unit
Direct materials
P1,200/unit
1,800/unit
16,000
Variable factory overhead 240/unit
Direct labor
450/unit
Fixed factory overhead
47,970
720/unit
Variable selling expense
120/unit
80/unit
Compute for the number of guitar sales which would give J&J the same operating income when they choose either of the
alternative presented above.

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