Homework Help is Here – Start Your Trial Now!
Business
Accounting
Patriot Company manufactures flags in two sizes, small and large. The company has total fixed costs of $297,000 per year. Additional data follow. Sales price per unit Variable costs per unit Sales mix percent Small $ 23 $ 14 80% Large $38 $ 19 20% The company is considering buying new equipment that would increase total fixed costs by $55,800 per year and reduce the variable costs 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 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.

Patriot Company manufactures flags in two sizes, small and large. The company has total fixed costs of $297,000 per year. Additional data follow. Sales price per unit Variable costs per unit Sales mix percent Small $ 23 $ 14 80% Large $38 $ 19 20% The company is considering buying new equipment that would increase total fixed costs by $55,800 per year and reduce the variable costs 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 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.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

Please help me 

Patriot Company manufactures flags in two sizes, small and large. The company has total fixed costs of $297,000 per year. Additional data follow. Sales price per unit. Variable costs per unit Sales mix percent Small $ 23 $ 14 Required 1 Required 2 80% The company is considering buying new equipment that would increase total fixed costs by $55,800 per year and reduce the variable costs of each type of flag by $1 per unit. Large $38 $ 19 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. Break-even point in units Break-even point - Small Break-even point - Large 20% Complete this question by entering your answers in the tabs below. 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.
Transcribed Image Text:Patriot Company manufactures flags in two sizes, small and large. The company has total fixed costs of $297,000 per year. Additional data follow. Sales price per unit. Variable costs per unit Sales mix percent Small $ 23 $ 14 Required 1 Required 2 80% The company is considering buying new equipment that would increase total fixed costs by $55,800 per year and reduce the variable costs of each type of flag by $1 per unit. Large $38 $ 19 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. Break-even point in units Break-even point - Small Break-even point - Large 20% Complete this question by entering your answers in the tabs below. 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.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS