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…

Answered: Patriot Company manufactures flags in…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 26E: Starling Co. manufactures one product with a selling price of 18 and variable cost of 12. Starlings...

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A company produces two products. E and F in batches of 100 units. The production and cost data are: The company can only perform 12,000 set-ups each period yet there is unlimited demand for each product. What is the differential profit from producing product E instead of product F for the year? A. $216,000 B. $204,000 C. $12,000 D. $54,000
Lotts Company produces and sells one product. The selling price is 10, and the unit variable cost is 6. Total fixed cost is 10,000. Required: 1. Prepare a CVP graph with Units Sold as the horizontal axis and Dollars as the vertical axis. Label the break-even point on the horizontal axis. 2. Prepare CVP graphs for each of the following independent scenarios: (a) Fixed cost increases by 5,000, (b) Unit variable cost increases to 7, (c) Unit selling price increases to 12, and (d) Fixed cost increases by 5,000 and unit variable cost is 7.
Royal Lawncare Company produces and sells two packaged products-Weedban and Greengrow. Revenue and cost information relating to the products follow: Product Weedban Selling price per unit Variable expenses per unit Traceable fixed expenses per year %24 %24 2.50 $ 130,000 Greengrow 2$ $ 13.00 $ 34,000 8.00 38.00 Last year the company produced and sold 37,000 units of Weedban and 17,000 units of Greengrow. Its annual common fixed expenses are $101,000. Required: Prepare a contribution format income statement segmented by product lines. Product Line Total Weedban Greengrow Company
Rongon Company manufactures twotypes of product. Selected information is given below:FantasyJoySelling price per unit$25$150Variable expenses per unit$15$35Number of units sold annually20,0005,000Fixed expenses total $480,800 per year. Required: i.Assuming the sales mix given above, do the following: a. Prepare a contribution format income statement showing both dollar and percent columns for each product and for the company as a whole. b. Compute the break-even point in dollars for the company as awhole and the margin of safety in both dollars and percent.ii.The company has developed a new product to be called Delight. Assume that the company could sell 10,000 units at $65each. The variable expenses would be $58each. The company’s fixed expenses would not change. a. Prepare another contribution format income statement, including sales of the Samoan Delight (sales of the other two products would not change). b. Compute the company’s new break-even point in dollars and the new margin…
Royal Lawncare Company produces and sells two packaged products-Weedban and Greengrow. Revenue and cost information relating to the products follow: Selling price per unit Variable expenses per unit Traceable fixed expenses per year. Weedban $ 8.00 $ 3.20 $ 135,000 Product Greengrow $ 35.00 $ 13.00 $ 45,000 Last year the company produced and sold 42,500 units of Weedban and 21,500 units of Greengrow. Its annual common fixed expenses are $97,000. Required: Prepare a contribution format income statement segmented by product lines. Total Company Product Line Weedban Greengrow
ABC Company makes a number'ðf products, including Product 0 The company produces and sells 20,000 units of Product O each year. The costs of Product Q at that activity level are: Per Unit Total Variable production costs Fixed production costs Variable selling, general, and administrative P15 P10 P200,000 costs P3
Here are data regarding the three products that Acme Company makes and sells: Product P Product Q Product R Annual customer demand, in units Selling price, per unit 1,200 units 1,500 units 1,000 units $80 $83 $45 Variable operating costs, per unit Machine time to produce one unit $35 $26 $20 2.5 hours 3.0 hours 1.25 hours Acme's current capacity is 4,250 machine hours per year. What is the maximum amount that Acme should be willing to pay per machine hour to acquire an additional 100 hours of capacity? ○ $18 $20 ○ $23 ○ $19
S Royal Lawncare Company produces and sells two packaged products-Weedban and Greengrow. Revenue and cost information relating to the products follow: Selling price per unit Variable expenses per unit Traceable fixed expenses per year Weedban $ 6.00 $2.40 $ 45,000 Product Greengrow $ 7.50 $5.25 $ 21,000 Last year the company produced and sold 15,000 units of Weedban and 28,000 units of Greengrow. Its annual common fixed expenses are $33,000. Prev Required: Prepare a contribution format income statement segmented by product lines. Total Company 1 of 4 Product Line Weedban Greengrow Next >
Shaw Company produces and sells two packaged products—Z-Bikes and y Bikes. Revenue and cost information relating to the products follow: Product Z Bikes Y Bikes Selling price per unit $ 175.00 $ 200.00 Variable expenses per unit $ 85.00 $ 105.00 Traceable fixed expenses per year $ 200,000 $ 75.00 Common fixed expenses in the company total $110 annually. Last year the company produced and sold 50,000 units of Z Bikes and 30,000 units of Y Bikes. Required: Prepare a contribution format income statement segmented by product lines.
Crane Industries sells two electrical components with the following characteristics. Fixed costs for the company are $700,000 per year. XL-709 CD-918 $31 23 Sales price $17 Variable cost 12 Sales volume86,800 units217,000 units How many units of EACH product must Crane Industries sell in order to break even?
Wang Company manufactures and sells a single product that sells for $640 per unit; variable costs are $352 per unit. Annual fixed costs are $985,500. Current sales volume is $4,390,000. Management targets an annual income of $1,315,000. Compute the unit sales to earn the target income. Select one: a. 6.164. Ob. 7,988. O c. 19,383. O d. 3,422. Oe. 4,934.
Staley Co. manufactures electronic equipment. The following is a summary of its basic cost and revenue data: Per Unit Percent Sales price $ 520 100.00 Variable costs 332 63.85 Unit contribution margin $ 187 35.96 Assume that Staley Co. is currently selling 640 products per month and monthly fixed costs are $80,400.Staley Co.'s operating income (πB) is calculated to be: Multiple Choice $38,280. $40,280. $43,280. $42,280. $39,280.

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