Patriot Company manufactures flags in two sizes, small and large. The company has total fixed costs of $251,000 per year. Additional data follow. Sales price per unit Variable costs per unit Sales mix percent Small $ 23 $ 14 80% Large $ 33 $ 19 The company is considering buying new equipment that would increase total fixed costs by $57,000 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 20% 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 3 Required 1 Required 2 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.
Patriot Company manufactures flags in two sizes, small and large. The company has total fixed costs of $251,000 per year. Additional data follow. Sales price per unit Variable costs per unit Sales mix percent Small $ 23 $ 14 80% Large $ 33 $ 19 The company is considering buying new equipment that would increase total fixed costs by $57,000 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 20% 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 3 Required 1 Required 2 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
10 part 2
Transcribed Image Text:Patriot Company manufactures flags in two sizes, small and large. The company has total fixed costs of $251,000 per year. Additional
data follow.
Sales price per unit
Variable costs per unit
Sales mix percent
Small
$ 23
$ 14
80%
Large
$ 33
$ 19
20%
The company is considering buying new equipment that would increase total fixed costs by $57,000 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 equipment is purchased. Compute the break-even point in total sales units and the number of units to sell
for each product.
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