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Parker Pottery produces a line of vases and a line of ceramic figurines. Each line uses the same equipment and labor; hence, there are no traceable fixed costs. Comme fixed cost equals $31,200. Parker's accountant has begun to assess the profitability of the two lines and has gathered the following data for last year: Figurines Price Variable cost Contribution margin Number of units Vases $40 # 30 $10 1,000 $70 42 $28 500 Required: If required, round your final answers to nearest whole value. 1. Compute the number of vases and the number of figurines that must be sold for the company to break even. Break-even vases 1,400 X units Break-even figurines 700 X units 2. Parker Pottery is considering upgrading its factory to improve the quality of its products. The upgrade will add $5,280 per year to total fixed cost. If the upgrade is successful, the projected sales of vases will be 2,000, and figurine sales will increase to 1,000 units. What is the new break-even point in units for each of the products

Parker Pottery produces a line of vases and a line of ceramic figurines. Each line uses the same equipment and labor; hence, there are no traceable fixed costs. Comme fixed cost equals $31,200. Parker's accountant has begun to assess the profitability of the two lines and has gathered the following data for last year: Figurines Price Variable cost Contribution margin Number of units Vases $40 # 30 $10 1,000 $70 42 $28 500 Required: If required, round your final answers to nearest whole value. 1. Compute the number of vases and the number of figurines that must be sold for the company to break even. Break-even vases 1,400 X units Break-even figurines 700 X units 2. Parker Pottery is considering upgrading its factory to improve the quality of its products. The upgrade will add $5,280 per year to total fixed cost. If the upgrade is successful, the projected sales of vases will be 2,000, and figurine sales will increase to 1,000 units. What is the new break-even point in units for each of the products

FINANCIAL ACCOUNTING
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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Multiple-Product Breakeven Parker Pottery produces a line of vases and a line of ceramic figurines. Each line uses the same equipment and labor; hence, there are no traceable fixed costs. Common fixed cost equals $31,200. Parker's accountant has begun to assess the profitability of the two lines and has gathered the following data for last year: Figurines Price Variable cost Contribution margin Number of units Required: Break-even vases Vases If required, round your final answers to nearest whole value. Break-even vases $40 30 Break-even figurines $10 Feedback 1,000 1. Compute the number of vases and the number of figurines that must be sold for the company to break even. 1,400 X units $70 Break-even figurines 2. Parker Pottery is considering upgrading its factory to improve the quality of its products. The upgrade will add $5,280 per year to total fixed cost. If the upgrade is successful, the projected sales of vases will be 2,000, and figurine sales will increase to 1,000 units. What is the new break-even point in units for each of the products? 1,620 X units 700 X units 42 810 X units $28 500
Transcribed Image Text:Multiple-Product Breakeven Parker Pottery produces a line of vases and a line of ceramic figurines. Each line uses the same equipment and labor; hence, there are no traceable fixed costs. Common fixed cost equals $31,200. Parker's accountant has begun to assess the profitability of the two lines and has gathered the following data for last year: Figurines Price Variable cost Contribution margin Number of units Required: Break-even vases Vases If required, round your final answers to nearest whole value. Break-even vases $40 30 Break-even figurines $10 Feedback 1,000 1. Compute the number of vases and the number of figurines that must be sold for the company to break even. 1,400 X units $70 Break-even figurines 2. Parker Pottery is considering upgrading its factory to improve the quality of its products. The upgrade will add $5,280 per year to total fixed cost. If the upgrade is successful, the projected sales of vases will be 2,000, and figurine sales will increase to 1,000 units. What is the new break-even point in units for each of the products? 1,620 X units 700 X units 42 810 X units $28 500
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