Sandhill Company makes three models of tasers. Information on the three products is given below.TinglerShockerStunnerSales$296,000$504,000 $200,000Variable expenses151,700207,900138,200Contribution margin144,300296,10061,800Fixed expenses117,800231,80095,000Net income$26,500$64,300$(33,200)Fixed expenses consist of $300,000 of common costs allocated to the three products based on relative sales, as well as direct fixedexpenses unique to each model of $29,000 (Tingler), $80,600 (Shocker), and $35,000 (Stunner). The common costs will be incurredregardless of how many models are produced. The direct fixed expenses would be eliminated if that model is phased out.James Watt, an executive with the company, feels the Stunner line should be discontinued to increase the company's net income.(a)Compute current net income for Sandhill Company.Net incomeA

Variable cost Depends upon the production of goods or services that is increment of sales increases…

Answered: Sandhill Company makes three models of…

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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Grover Company has the following data for the production and sale of 2,000 units. Sales price per unit $ 800 per unit Fixed costs: Marketing and administrative $ 400,000 per period Manufacturing overhead $ 200,000 per period Variable costs: Marketing and administrative $ 50 per unit Manufacturing overhead $ 80 per unit Direct labor $ 100 per unit Direct Materials $ 200 per unit What is the conversion cost per unit? $280 $180 $100 $380 A cost that would be included in product costs under both absorption costing and variable costing is: supervisory salaries. variable selling expenses. factory rent. variable manufacturing costs. Younes Inc. manufactures industrial components. One of its products, which is used in the construction of industrial air conditioners, is known as P06. Data concerning this product are given below: Per Unit Selling price $ 220 Direct…
A cement manufacturer has supplied the following data: Tons of cement produced and sold Sales revenue Variable manufacturing expense Fixed manufacturing expense Variable selling and administrative expense Fixed selling and administrative expense Net operating income What is the company's unit contribution margin? (Round your intermediate calculations to 2 decimal places.) Multiple Choice $2.00 per unit $0.32 per unit O $4.30 per unit 235,000 $1,010,500 $ 416,000 $ 275,000 $ 54,000 $ 215,000 $ 50,500 $2.30 per unit
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Smoky Mountain Corporation makes two types of hiking boots—the Xtreme and the Pathfinder. Data concerning these two product lines appear below: Xtreme Pathfinder Selling price per unit $ 120.00 $ 87.00 Direct materials per unit $ 63.60 $ 55.00 Direct labor per unit $ 12.00 $ 10.00 Direct labor-hours per unit 1.2 DLHs 1.0 DLHs Estimated annual production and sales 25,000 units 72,000 units The company has a traditional costing system in which manufacturing overhead is applied to units based on direct labor-hours. Data concerning manufacturing overhead and direct labor-hours for the upcoming year appear below: Estimated total manufacturing overhead $ 2,040,000 Estimated total direct labor-hours 102,000 DLHs Required: 1. Compute the product margins for the Xtreme and the Pathfinder products under the company’s traditional costing system. 2. The company is considering replacing its traditional costing system with…
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