Answered: National Co. produces two models: Model…

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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Witrox Bhd sells two models of smartphone, the Oppo and the Xiaomi. Oppo RM 60.0 35.0 25.0 Sales price per unit Variable cost per unit Contribution margin per unit Witrox has determined that it would break even at an annual sales volume of 50,000 units, of which 75% would be Oppo. Required: a) What are the contribution margin ratios for each product and the company? b) What is the amount of Witrox's estimated annual fixed costs? Xiaomi RM 85.0 54.0 31.0 c) What is the sales mix? d) Prepare a product line income statement with operating income of RM500,000. Fixed production costs will increase RM45,000 and fixed administrative costs will increase RM22,500 to support the increase in volume.
Fountain Corp. has a selling price of $14 per unit and variable costs of $9.80 per unit. When 18,000 units are sold, profits equaled $24,900. What is the margin of safety?
A company operates in a competitive marketplace. They look to the market to determine their selling price. It looks like the market will bear a price of $438. The company has a goal of earning 10% return on sales on each unit. What would their target cost be? Round your answer to the nearest whole dollar.

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National Co. produces two models: Model X has sales of 500 units with a contribution margin of P40 each; Model Y has sales of 350 units with a contribution margin of P50 each. If sales of Model Y increase by 100 units, how much will profit change?