Royal Lawncare Company produces and sells two packaged products-Weedban and Greengrow. Revenueand cost information relating to the products follow: Product Weedban Greengrow Selling price per unit S10.00 S 31.00 Variable expenses per unit $ 3.10 $ 13.00 Traceable fixed expenses per year $ 135,000 S47,000 Last year the company produced and sold 36, 500 units of Weedban and 17,000 units of Greengrow.Its annual common fixed expenses are $105,000. Required: Prepare a contribution format incomestatement segmented by product lines.

The contribution margin income statement arranges the information so that management is able to…

Answered: Royal Lawncare Company produces and…

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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Andretti Company has a single product called a Dak. The company normally produces and sells 82,000 Daks each year at a selling price of $64 per unit. The company's unit costs at this level of activity are given below: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit $ 7.50 11.00 2.20 5.00 3.70 3.00 $ 32.40 ($410,000 total) ($246,000 total) A number of questions relating to the production and sale of Daks follow. Each question is independent. Required: 1-a. Assume Andretti Company has sufficient capacity to produce 102,500 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 25% above the present 82,000 units each year if it increased fixed selling expenses by $100,000. What is the financial advantage (disadvantage) of investing an additional $100,000 in fixed selling expenses? 1-b. Would the additional…
Andretti Company has a single product called a Dak. The company normally produces and sells 85,000 Daks each year at a selling price of $60 per unit. The company's unit costs at this level of activity are given below: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit $ 9.50 11.00 3.70 6.00 ($510,000 total) 4.70 3.50 ($297,500 total) $ 38.40 A number of questions relating to the production and sale of Daks follow. Each question is independent. Required: 1-a. Assume that Andretti Company has sufficient capacity to produce 106,250 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 25% above the present 85,000 units each year if it were willing to increase the fixed selling expenses by $120,000. What is the financial advantage (disadvantage) of investing an additional $120,000 in fixed selling expenses? 1-b. Would…
Wren Co. manufactures and sells two products with selling prices and variable costs as follows: A) selling price $18.00, variable costs $12.00, and B) selling price $22.00, variable costs $14.00. Wren's total annual fixed costs are $38,400. Wren sells four units of A for every unit of B. If operating income was $28,800 what was the number of units Wren sold?
Karlik Enterprises distributes a single product whose selling price is $24 per unit and whose variable expense is $18 per unit. The company’s monthly fixed expense is $24,000. Exercise 6-2 (Static) Part 1 Required: 1. Prepare a cost-volume-profit graph for the company up to a sales volume of 8,000 units. (Use the line tool to draw three lines (Total Sales Revenue, Fixed Expense, Total Expense). Each line should only contain the two endpoints. For your graph to grade correctly, you must enter the exact coordinates. Once all points have been plotted, click on the line (not individual points) and a tool icon will pop up. You can use this to enter exact co-ordinates for your points as needed. To remove a line from the graph, click on the line and select delete option.)
Zabeer Company is a large retailer of custom-built air conditioning units for commercial buildings. The company assembled the information shown below for the quarter ended March 31:Total sales revenue Tk.6,00,000Selling price per unit Tk.450 Variable selling expense per unit Tk.45Variable administrative selling expense per unit Tk.30Total fixed selling expense Tk.170,000Total fixed administrative expense Tk.130,000Merchandise inventory, opening balance Tk.60,000Merchandise inventory, ending balance Tk.1,10,000Merchandise purchase Tk.2,40,000Required: i. Prepare a traditional format income statement for the quarter ended March 31. ii. Prepare a contribution format income statement for the quarter ended March 31.
Banjo Corporation produces and sells two models of vacuum cleaners, Standard and Deluxe. Company records show the following data relating to these two products: Standard Deluxe Selling price per unit P140 P155 Variable production costs per unit P70 P110 Variable selling and admin, expense per unit P 11.50 P 18 Expected monthly sales in units 600 1,200 The company's total monthly fixed expense is P40,000. The break-even in sales pesos for the expected sales mix is P
Luna Company makes special equipment used in cell towers. Each unit sells for $420. Luna produces and sells 12,700 units per year. They have provided the following income statement data: Traditional Format Contribution Margin Format Sales revenue $5,334,000 Sales revenue $5,334,000 Cost of goods sold 2,100,000 Variable costs: Gross profit 3,234,000 Manufacturing 900,000 Selling & admin. expenses 660,000 Selling & admin. 400,000 Contribution margin 4,034,000 Fixed costs: Manufacturing 1,200,000 Selling & admin. 260,000 Operating income $2,574,000 Operating income $2,574,000 A foreign company has offered to buy 75 units for a reduced sales price of $320 per unit. The marketing manager says the sale will not affect the company's regular sales. The sales manager says…
Royal Lawncare Company produces and sells two packaged products—Weedban and Greengrow. Revenue and cost information relating to the products follow: Product Weedban Greengrow Selling price per unit $ 9.00 $ 37.00 Variable expenses per unit $ 3.00 $ 13.00 Traceable fixed expenses per year $ 134,000 $ 36,000 Last year the company produced and sold 45,000 units of Weedban and 17,000 units of Greengrow. Its annual common fixed expenses are $107,000. Required: Prepare a contribution format income statement segmented by product lines.
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 Product Weedban $ 9.00 $ 2.50 $ 135,000 Greengrow $33.00 $ 13.00 $ 49,000 Last year the company produced and sold 36,500 units of Weedban and 16,500 units of Greengrow. Its annual common fixed expenses are $111,000. Required: Prepare a contribution format income statement segmented by product lines. Total Company Product Line Weedban Greengrow
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 $ $ $ 133,000 Greengrow $ $ $ 44,000 8.00 34.00 2.40 13.00 Common fixed expenses in the company total $95,000 annually. Last year the company produced and sold 37,000 units of Weedban and 16,000 units of Greengrow. Required: Prepare a contribution format income statement segmented by product lines. Product Line Total Company Weedban Greengrow
Vandenberg, Inc., produces and sells two products: a ceiling fan and a table fan. Vandenbergplans to sell 30,000 ceiling fans and 70,000 table fans in the coming year. Product price and costinformation includes: Ceiling Fan Table FanPrice $60 $15Unit variable cost $12 $7Direct fixed cost $23,600 $45,000Common fixed selling and administrative expenses total $85,000.Required:1. What is the sales mix estimated for next year (calculated to the lowest whole number foreach product)?2. Using the sales mix from Requirement 1, form a package of ceiling fans and table fans.How many ceiling fans and table fans are sold at break-even?3. Prepare a contribution-margin-based income statement for Vandenberg, Inc., based on theunit sales calculated in Requirement 2.4. What if Vandenberg, Inc., wanted to earn operating income equal to $14,400? Calculate thenumber of ceiling fans and table…
Island Novelties, Incorporated, of Palau makes two products-Hawaiian Fantasy and Tahitian Joy. Each product's selling price, variable expense per unit and annual sales volume are as follows: Hawaiian Fantasy Tahitian Joy Selling price per unit $ 12 $ 120 Variable expense per unit $9 $ 48 Number of units sold annually 36,000 5,400 Fixed expenses total $ 437,000 per year. Required: 1. 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 company's break - even point in dollar sales. Also, compute its margin of safety in dollars and its margin of safety percentage. 2. The company has developed a new product called Samoan Delight that sells for $45 each and that has variable expenses of $27 per unit. If the company can sell 12,000 units of Samoan Delight without incurring any additional fixed expenses: a. Prepare a revised contribution…

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