Metlock sells books, movies, and magazines to a wide customer base. In a typical month, about 40% of its sales volume is from books,40% from movies, and 20% from magazines. The selling price and cost information for each of these product categories is as follows.Selling priceVariable cost/unit(a)(b)✓ Your answer is correct.In addition, Metlock incurs facility and administrative costs that average $28,080 per month.Weighted-average contribution margineTextbook and MediaBooks$93Find the weighted-average contribution margin per unit for this company. (Round answer to 2 decimal places, e.g. 15.25.)✓ Your answer is correct.Books(c)MoviesMagazineseTextbook and MediaMovies$14* Your answer is incorrect.9Determine how many units from each product category Metlock must sell to break even. (Round answers to O decimals, e.g. 15.)BooksMoviesMagazinesMagazines2160 units2160 units1080 units$511200 unitsMetlock normally sells 3,000 books each month. Given the current sales mix, how many movies and magazines must it normallysell in a month?1200 units600 units5.2 per unitAttempts: unlimitedAttempts: unlimited

One of the main components for the purpose of determining the break-even units is the contribution…

Answered: Metlock sells books, movies, and…

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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Blossom Company makes radios that sell for $40 each. For the coming year, management expects fixed costs to total $126,380 and variable costs to be $32 per unit. Compute the sales dollars required to earn net income of $153,620.
A company reported the following data: • Sales price per unit: $10 • Fixed cost per month: $20,000 Variable cost per unit: $2 How many units must this company sell each month in order to reach a target profit of $50,000?
Sunland Orthotics Company distributes a specialized ankle support that sells for $ 40. The company’s variable costs are $ 30 per unit; fixed costs total $ 320,000 each year. Calculate contribution margin ratio. Contribution margin ratio =25% If sales increase by $ 52,000 per year, by how much should operating income increase? (Use the rounded contribution margin ratio calculated in the previous part.) Change in operating income?
Houpe Corporation produces and sells a single product. Data concerning that product appear below: Per Unit Percent of Sales Selling price $ 140 100% Variable expenses 42 30% Contribution margin $ 98 70% Fixed expenses are $490,000 per month. The company is currently selling 6,000 units per month. The marketing manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager has proposed a commission of $11 per unit. In exchange, the sales staff would accept a decrease in their salaries of $58,000 per month. (This is the company's savings for the entire sales staff.) The marketing manager predicts that introducing this sales incentive would increase monthly sales by 100 units. What should be the overall effect on the company's monthly net operating income of this change?
Data related to the expected sales of laptops and tablets for Tech Products Inc. for the current year, which is typical of recent years, are as follows: Products Unit Selling Price Laptops $230 Tablets 420 The estimated fixed costs for the current year are $402,500. Unit Variable Cost $160 200 Why is it so different? The break-even point is heavily toward the product with the Sales Mix Required: 1. Determine the estimated units of sales of the overall (total) product, E, necessary to reach the break-even point for the current year. units units 30% 2. Based on the break-even sales (units) in part (1), determine the unit sales of both laptops and tablets for the current year. Laptops: Tablets: units 70% 3. Assume that the sales mix was 70% laptops and 30% tablets. Determine the estimated units of sales of the overall product necessary to reach the break-even point for the current year. units in this scenario than in part (1) because the sales mix is weighted contribution margin per unit…
Raveen Products sells camping equipment. One of the company’s products, a camp lantern, sells for $90 per unit. Variable expenses are $63 per lantern, and fixed expenses associated with the lantern total $135,000 per month. Required: 1. Compute the company’s break-even point in number of lanterns and in total sales dollars. 2. Compute the company’s Margin of Safety in sales dollar and in percentage. 3. At present, the company is selling 8,000 lanterns per month. The sales manager is convinced that a 10% reduction in the selling price will result in a 25% increase in the number of lanterns sold each month. Prepare two contribution format income statements, one under present operating conditions, and one as operations would appear after the proposed changes. Show both total and per unit data on your statements. 4. Refer to the data in (3) above. How many lanterns would have to be sold at the new selling price to yield a minimum net operating income of $72,000 per month?
A company produces several product lines. One of those lines generates the following annual cost and production data: The company adds 40% to its production cost in selling to the retailer. The retailer in turn adds a 50% profit margin when selling to its customers. How much would it cost a retailer to buy 100 units of the product? (a) $4800 (b) $6720 (c) $7200 (d) $1008
Ozark Metal Company makes a single product that sells for $45.5 per unit. Variable costs are $29.1 per unit, and fixed costs total $65,355 per month. Required: a. Calculate the number of units that must be sold each month for the firm to break even. b. Assume current sales are $414,000. Calculate the margin of safety and the margin of safety ratio. c. Calculate operating income if 5,300 units are sold in a month. d. Calculate operating income if the selling price is raised to $48.5 per unit, advertising expenditures are increased by $10,000 per month, and monthly unit sales volume becomes 6,000 units. e. Assume that the firm adds another product to its product line and that the new product sells for $22 per unit, has variable costs of $16 per unit, and causes fixed expenses in total to increase to $87,000 per month. Calculate the firm's operating income if 5,300 units of the original product and 4,200 units of the new product are sold each month. For the original product, use the…
Last month when Holiday Creations, Incorporated, sold 41,000 units, total sales were $164,000, total variable expenses were $116,440, and fixed expenses were $38,600. Required: 1. What is the company's contribution margin (CM) ratio? 2. What is the estimated change in the company's net operating income if it can increase sales volume by 600 units and total sales by $2,400? (Do not round intermediate calculations.)
I need help with parts 1 and 2

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