Mercy, a leading firm in the sports industry, produces basketballs for the consumer market. For the year ended December 31, 2017, Mercy sold 246,700 basketballs at an average selling price of $41 per unit. The following information also relates to 2017 (assume constant unit costs and no variances of any kind): E (Click the icon to view the 2017 data.) Read the requirements. Requirement 1. Calculate the breakeven point (in basketballs sold) in 2017 under: (a) Variable costing and (b) Absorption costing. i Data Table - X a. Calculate the breakeven point in units under variable costing. Breakeven point under variable costing Inventory, January 1, 2017: 29,300 basketballs Inventory, December 31, 2017: 22,600 basketballs Fixed manufacturing costs: $1,200,000 Fixed administrative costs: $3,234,000 1 Requirements Direct materials costs: $12 per basketball Direct labor costs: $9 per basketball 1. Calculate the breakeven point (in basketballs sold) in 2017 under: Print Done a. Variable costing b. Absorption costing 2. Suppose direct materials costs were $16 per basketball instead. Assuming all other data are the same, calculate the minimum number of basketballs Mercy must have sold in 2017 to attain a target operating income of $70,000 under: a. Variable costing b. Absorption costing Choose from any list or enter any n Print Done 4 parts remaining Cieal All Check Answer
Mercy, a leading firm in the sports industry, produces basketballs for the consumer market. For the year ended December 31, 2017, Mercy sold 246,700 basketballs at an average selling price of $41 per unit. The following information also relates to 2017 (assume constant unit costs and no variances of any kind): E (Click the icon to view the 2017 data.) Read the requirements. Requirement 1. Calculate the breakeven point (in basketballs sold) in 2017 under: (a) Variable costing and (b) Absorption costing. i Data Table - X a. Calculate the breakeven point in units under variable costing. Breakeven point under variable costing Inventory, January 1, 2017: 29,300 basketballs Inventory, December 31, 2017: 22,600 basketballs Fixed manufacturing costs: $1,200,000 Fixed administrative costs: $3,234,000 1 Requirements Direct materials costs: $12 per basketball Direct labor costs: $9 per basketball 1. Calculate the breakeven point (in basketballs sold) in 2017 under: Print Done a. Variable costing b. Absorption costing 2. Suppose direct materials costs were $16 per basketball instead. Assuming all other data are the same, calculate the minimum number of basketballs Mercy must have sold in 2017 to attain a target operating income of $70,000 under: a. Variable costing b. Absorption costing Choose from any list or enter any n Print Done 4 parts remaining Cieal All Check Answer
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Mercy, a leading firm in the sports industry, produces basketballs for the consumer market. For the year ended December 31, 2017, Mercy sold 246,700 basketballs at an average selling price of $41 per unit. The following
information also relates to 2017 (assume constant unit costs and no variances of any kind):
E (Click the icon to view the 2017 data.)
Read the requirements
Requirement 1. Calculate the breakeven point (in basketballs sold) in 2017 under: (a) Variable costing and (b) Absorption costing.
- X
Data Table
a. Calculate the breakeven point in units under variable costing.
Breakeven point
= under variable costing
Inventory, January 1, 2017:
29,300 basketballs
Inventory, December 31, 2017:
22,600 basketballs
Fixed manufacturing costs:
$1,200,000
Fixed administrative costs:
$3,234,000
Requirements
Direct materials costs:
$12 per basketball
Direct labor costs:
$9 per basketball
1. Calculate the breakeven point (in basketballs sold) in 2017 under:
a. Variable costing
Print
Done
b. Absorption costing
2. Suppose direct materials costs were $16 per basketball instead. Assuming all
other data are the same, calculate the minimum number of basketballs Mercy
must have sold in 2017 to attain a target operating income of $70,000 under:
a. Variable costing
b. Absorption costing
Choose from any list or enter any n
Print
Done
4 parts
remaining
Creal All
Check Answer
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