Miller Company produces speakers for home stereo units. The speakers are sold to retail stores for £30. Variable costs per unit are: Direct materials £9.00; Direct labour 4.50;Distribution 1.50 and Variable Factory overhead 3.00. Fixed costs per month are: Factory overhead £120,000 and Selling and admin. 60,000. The variable distribution costs arefor transportation to the retail stores. The current production and sales volume is 20,000 per year. Capacity is 25,000 units per year. An Atlanta wholesaler has proposed toplace a special one-time order for 7,000 units at a special price of £25.20 per unit. The wholesaler would pay all distribution costs, but there would be additional fixed sellingand administrative costs of £6,000. In addition, assume that overtime production is not possible and that allother information remains the same as the original data. The effecton profits if the special order is accepted isSelect one:a. cannot be determinedb. £30,900 decreasec. £50,100 increased. £30,900 increasee. £50,100 decrease

Variable Cost -Any expense that fluctuates depending on the volume of output or the quantity of…

Answered: Miller Company produces speakers for…

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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Maple Enterprises sells a single product with a selling price of $70 and variable costs per unit of $21. The company's monthly fixed expenses are $29,400. A. What is the company's break-even point in units? Break-even units 600 units B. What is the company's break-even point in dollars? Break-even dollars $49.00 C. Construct a contribution margin income statement for the month of September when they will sell 800 units. Use a minus sign for a net loss if present. Income Statement Sales $56,000 Variable Costs -16,800 Contribution Margin $39,200 Fixed Costs -29,400 Net Income $9,800 D. How many units will Maple need to sell in order to reach a target profit of $44,100? New break-even units _____ units E. What dollar sales will Maple need in order to reach a target profit of $44,100? New break-even dollars $_____ F. Construct a contribution margin income statement for Maple that reflects $140,000 in sales volume. Income Statement
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