Patriot Company manufactures flags in two sizes, small and large. The company has total fixed costs of $261,000 per year. Additional data follow. Sales price per unit Variable costs per unit Sales mix percent Small $ 25 $ 16 80% Large $ 35 $21 20% The company is considering buying new equipment that would increase total fixed costs by $50,300 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. Complete 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 margin
Patriot Company manufactures flags in two sizes, small and large. The company has total fixed costs of $261,000 per year. Additional data follow. Sales price per unit Variable costs per unit Sales mix percent Small $ 25 $ 16 80% Large $ 35 $21 20% The company is considering buying new equipment that would increase total fixed costs by $50,300 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. Complete 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 margin
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Patriot Company manufactures flags in two sizes, small and large. The company has total fixed costs of $261,000 per year. Additional
data follow.
Sales price per unit
Variable costs per unit
Sales mix percent
Small
$ 25
$ 16
80%
Large
$ 35
$21
20€
The company is considering buying new equipment that would increase total fixed costs by $50,300 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.
Complete 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 margin
Transcribed Image Text: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 not purchased. Determine the break-even point in total sales units and the break-even point in
units for each product.
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.
Break-even point in units
Break-even point - Small
Break-even point-Large
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