Patriot Company manufactures flags in two sizes, small and large. The company has total fixed costs of $270,000 per year. Additionaldata followSales price per unitVariable costs per unitSales nix percentSmall$ 26$ 1880%Large$ 38$ 20The company is considering buying new equipment that would increase total fixed costs by $47,900 per year and reduce the variablecosts of each type of flag by $1 per unit.201Required:1. Compute the weighted-average contribution margin without the new equipment.2. Assume the new equipment is not purchased. Determine the break-even point in total sales units and the break-even point in unitsfor each product.3. Assume the new equipment is purchased. Compute the break-even point in total sales units and the number of units to sell for eachproduct.Break-even point in unitsBreak-even point-SmallBreak-even point-LargeComplete this question by entering your answers in the tabs below.Required 1 Required 2 Required 3.Compute the weighted-average contribution margin without the new equipment.Weighted-average contribution marginRequired 1 Required 2 Required 3Assume the new equipment is not purchased. Determine the break-even point in total sales units and the break-even point inunits for each product.Break-even point in unitsBreak-even point-SmallBreak-even point -LargeComplete this question by entering your answers in the tabs below.Required 1 Required 2 Required 3Assume the new equipment is purchased. Compute the break-even point in total sales units and the number of units to sellfor each product.

The fixed cost is the cost that does not vary with the level of activity and even if the output is…

Answered: Patriot Company manufactures flags in…

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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Patriot Company manufactures flags in two sizes, small and large. The company has total fixed costs of $260,000 per year. Additional data follow. Sales price per unit Variable costs per unit Sales mix percent Small $ 26 $ 13 80% Large $33 $ 20 20% The company is considering buying new equipment that would increase total fixed costs by $51,500 per year and reduce the variable costs of each type of flag by $1 per unit. Break-even point in units Break-even point - Small Break-even point - Large Required: 1. Compute the weighted-average contribution margin without the new equipment. 2. Assume the new equipment is not purchased. Determine the break-even point in total sales units and the break-even point in units for each product. 3. Assume the new equipment is purchased. Compute the break-even point in total sales units and the number of units to sell for each product. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Assume the new…
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