Patriot Company manufactures flags in two sizes, small and large. The company has total fixed costs of $555,000 per year. Additionaldata follow.Sales price per unitVariable costs per unitSmall$ 42$ 32$Large62$ 273:36Sales mix percent80%20%<The company is considering buying new equipment that would increase total fixed costs by $61,000 per year and reduce the variablecosts of each type of flag by $1 per unit.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 inunits 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 foreach product.Complete this question by entering your answers in the tabs below.Required 1 Required 2Required 3Compute the weighted-average contribution margin without the new equipment.Weighted-average contribution margin< Required 1Required 2 >

To compute the weighted-average contribution margin without the new equipment, follow these…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Q.1 ChemCo has developed a new product, and has consulted with its marketing department, who have determined that the market share will be 20,000 units, and have recommended that a selling price of $60.00 per unit would be app- ropriate. ChemCo has been able to keep the cost per unit at $50.00. The company has spent a total of $900,000 to design and develop this product. Required: Use the above information to compute as follows: 1. Compute the expected margin for ChemCo 2. Compute the expected turnover 3. Compute the ROI Explain why it is necessary to do the above computations, and show how management can use this information for managing operations
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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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