Classic ProblemsProblem 8.1: Outland Bakery tried using gluten-free flour in its three most popular cookies. After several attempts and a lot ofinedible cookies, the company perfected new recipes that yield delicious gluten-free cookies. The costs of producing a batch of 100cookies are as follows:ChocolateChipOatmealSugarRaisinSales price$130$125$120Variable cost$81$86$78Fixed cost181520Pounds of flour2.52.52Sales mix40%25%35%Required: Based upon market research, Outland's CEO believes the company can sell a total 40,000 batches of cookies. Thecompany's flour supplier, however, will only be able to provide 50,000 pounds of flour. How many batches of each type of cookieshould the company bake? Compute the company's TOTAL contribution margin?ProblemSuper Socks currently produces 3 soclines and now considers a new sockFornew line, the company expectsto sell 20,000 pairs at a sale price of $10 per pair. Variable product costs will be $6.50 per pair and fixed overhead will be $1.60 perpair. Half of the fixed overhead is directly traceable to the new sock line. To promote the socks, the company proposes commissionsof $0.50 per pair and a $10,000 per month advertising campaign. The new line will be allocated $25,000 in fixed corporate costs.Required: Determine the estimated impact of the new sock line on Super Socks company-wide profitabilityProblem 8.3: Vistas produces vinyl replacement windows. The company has Total capacity of 500,000 windows. Budgetedproduction is 450,000 windows per year, a quantity that has been constant over the past three years. Based on the budget, theaccounting department has calculated the following unit costs for the windows:Direct materials$ 40Direct labor18Manufacturing overhead20Selling and administrative14The company's budget includes $5,400,000 in fixed overhead and $3,150,000 in fixed selling and administrative expenses. Windowssell for $150 each. A 2% distributor's commission is included in the selling and administrative expenses. Required: ScandiHomes,Finland's second largest homebuilder, has approached Vistas about a special order of 75,000 windows. Given the size of the order,ScandiHomes has requested a 40% volume discount on Wilson's normal selling price. Should Wilson grant ScandiHomes' request?

Dear Student, Since you have asked multiple questions, We are providing a solution for Problem 8.1.…

Required: Based upon market research, Outland's CEO believes the company can sell a total 40,000 batches of cookies. The company's flour supplier, however, will only be able to provide 50,000 pounds of flour. How many batches of each type of cookie should the company bake? Compute the company's TOTAL contribution margin?

Required: Based upon market research, Outland's CEO believes the company can sell a total 40,000 batches of cookies. The company's flour supplier, however, will only be able to provide 50,000 pounds of flour. How many batches of each type of cookie should the company bake? Compute the company's TOTAL contribution margin?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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