Gallery Corporation makes two products, footballs and baseballs. Additional information follows: Footballs Baseballs Units 2,000 2,500 Sales $60,000 $25,000 Variable costs 24,000 13,750 Fixed costs 10,000 5,250 Net income $26,000 $6,000 Yards of leather per unit 1.25 0.30 Profit per unit $13.00 $2.40 Contribution margin per unit $18.00 $4.50 Assume that Gallery is able to order an additional 2,500 yards of leather and wishes to maximize its income. Of the additional units it produces, at least 500 of each product are necessary for sales.How many units of each must be produced?

The contribution margin is a valuable indicator for determining the profitability of specific goods…

Answered: llery Corporation makes two 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

Question

Gallery Corporation makes two products, footballs and baseballs. Additional information follows:

	Footballs	Baseballs
Units	2,000	2,500
Sales	$60,000	$25,000
Variable costs	24,000	13,750
Fixed costs	10,000	5,250
Net income	$26,000	$6,000
Yards of leather per unit	1.25	0.30
Profit per unit	$13.00	$2.40
Contribution margin per unit	$18.00	$4.50

Assume that Gallery is able to order an additional 2,500 yards of leather and wishes to maximize its income. Of the additional units it produces, at least 500 of each product are necessary for sales.

How many units of each must be produced?

Expert Solution

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Discontinuing operations for a product or a service line

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