Legrand Company produces hand cream in plastic jars. Each jar sells for $3.40. The variable cost for each jar (materials, labor, and overhead) totals $2.55. The total fixed cost is $58,140. During the most recent year, 81,600 jars were sold.
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Legrand Company produces hand cream in plastic jars. Each jar sells for $3.40. The variable cost for each jar (materials, labor, and
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- Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling $15.00 per ball, of which 60% is direct labor cost. Last year, the company sold 56,000 of these balls, with the following results: Sales (56,000 balls) Variable expenses Contribution margin Fixed expenses $ 1,400,000 840,000 560,000 373,000 Net operating income $ 187,000 Required: 1. Compute (a) last year's CM ratio and the break-even point in balls, and (b) the degree of operating leverage at last year's sales level. 2. Due to an increase in labor rates, the company estimates that next year's variable expenses will increase by $3.00 per ball. If this change takes place and the selling price per ball remains constant at $25.00, what will be next year's CM ratio and the break-even point in balls? 3. Refer to the data in (2) above. If the expected change in…Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured In a small plant that relies heavily on direct labor workers. Thus, varlable expenses are high, totaling $15.000 per ball, of which 60% Is direct labor cost Last year, the company sold 62.000 of these balls, with the following results: $ 1,558, 000 930, e00 Sales (62,889 balls) Variable expenses Contribution margin Fixed expenses 620,e00 426,000 $ 194, 000 Net operating income Required: 1. Compute (a) last year's CM ratio and the break-even polnt in balls, and (b) the degree of operating leverage at last year's sales level. 2 Due to an Increase in labor rates, the company estimates that next year's varlable expenses will increase by $3.00 per ball. If this change takes place and the selling price per ball remalns constant at $25.00, what will be next year's CM ratio and the break-even polnt in balls? 3. Refer to the data in (2) above. If the expected change in…Bonita Industries produces tinted SPF 100 moisturizer that it sells for $120 each. Each bottle costs $6 of variable costs to make. During the most recent quarter, 1100 bottles of moisturizer were manufactured and sold. Fixed costs for the quarter were $20 per unit for a total of $22000. What is the company's contribution margin ratio?
- Ovation Company has a single product called a Bit. The company normally produces and sells 64,800 Bits each year at a selling price of $47 per unit. The company's unit costs at this level of activity are given below: Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit $10.50 7.50 3.60 4.80 ($311,040 total) 6.60 2.70 ($174,960 total) $35.70 A number of questions relating to the production and sale of Bits follow. Each question is independent. Required. 1. Assume that Ovation Company has sufficient capacity to produce 97,200 Bits each year without any increase in fixed manufacturing overhead costs. The company could increase its sales by 25% above the current 64,800 units each year if it were willing to increase the fixed selling expenses by $105,000. a. Calculate the incremental net operating income. Incremental operating income $ 199,560 b. Would the increased fixed selling…Morning Dove Company manufactures one model of birdbath, which is very popular. Morning Dove sells all units it produces each month. The relevant range is 0-1,900 units, and monthly production costs for the production of 1,600 units follow. Morning Dove's utilities and maintenance costs are mixed with the fixed components shown in parentheses. Suppose it sells each birdbath for $24. Calculate the unit contribution margin and contribution margin ratio for each birdbath sold. Complete the contribution margin income statement assuming that Morning Dove produces and sells 1,800 units.Sweet Nature Corporation manufactures “Sweet ‘n Salty” trail mix. Last month, the company produced and sold 800,000 units and sold them at a price of $4 each. Related information appears below:Item Total CostUtilities for factory $17,000 Advertising (based on number of website page views) 22,000 Costs for product packaging 125,000 Chocolate pieces and dried fruit 152,800 Wages for factory cleaning staff 275,000 Rent of factory and equipment 350,000 Salaries for office staff 475,000 Wages for production crew 486,000 Insurance on the factory 18,000 Nuts (e.g. peanuts, cashews and almonds) 878,950 Required:a. Identify all costs above as either a product cost (specifically DM, DL or OH) or a period cost (PC).b. The company uses the cost-plus approach to pricing and wants to achieve an approximate profit of 25 percent. Did it meet its profit objective last month? Briefly explain. Regardless, what two specific actions would you recommend to improve its profitability Prepare a CVP income…
- HardevNorthwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, varlable expenses are high, totaling $15.00 per ball, of which 60% Is direct labor cost Last year, the company sold 62.000 of these balls, with the following results: Sales (62,809 balls) Variable expenses Contribution margin Fixed expenses $ 1,558, 000 930,e00 620, e00 426, e00 Net operating income $ 194,e00 Required: 1. Compute (a) last year's CM ratio and the break-even polnt In balls, and (b) the degree of operating leverage at last year's sales level. 2 Due to an Increase In labor rates, the company estimates that next year's varlable expenses will Increase by $3.00 per ball. If this change takes place and the selling price per ball remalns constant at $25.00, what will be next year's CM ratio and the break-even polnt in balls? 3. Refer to the data in (2) above. If the expected change In…What is also the direct materials
- Companion Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $58 per unit. The company, which is currently operating below full capacity, charges factory overhead to production at the rate of 44% of direct labor cost. The total unit costs to produce comparable carrying cases are expected to be as follows: Direct materials $28.00 Direct labor 17.00 Factory overhead (44% of direct labor) 7.48 Total cost per unit $52.48 If Companion Computer Company manufactures the carrying cases, fixed factory overhead costs will not increase and variable factory overhead costs associated with the cases are expected to be 15% of the direct labor costs. a. Prepare a differential analysis dated February 24 to determine whether the company should Make Carrying Case (Alternative 1) or Buy Carrying Case (Alternative 2). If required, round your answers to two decimal places. If an amount is zero, enter "0". For those boxes in which you…Cowboy Ice Cream Company (CIC) produces ice cream bars that it markets through a variety of grocery stores. It makes the ice cream bars in batches of 2,000 units. CIC produced 36,000 ice cream bars during the prior accounting period. The cost of producing the ice cream bars is shown below. Materials cost ($29 per unit x 36,000) Labor cost ($26 per unit x 36,000) Manufacturing supplies ($9 x 36,000) Batch-level costs (18 batches at $6,000 per batch) Product-level costs $1,044,000 936,000 324,000 108,000 300,000 370,000 Facility-level costs Total costs $3,082,000 Cost per unit = $3,082,000 + 36, 000 = $85.61 Required a. OnCue has offered to buy a batch of 500 ice cream bars for $68 each. CIC's normal selling price is $93 per unit. Calculate the relevant cost per unit for the special order. Based on the preceding quantitative data, should CIC accept the special order? b. OnCue offered to buy a batch of 2,000 ice cream bars for $68 per unit, calculate the relevant cost per unit for the…