**Transcription and Explanation for Educational Website**---**Problem Statement:**Lincoln, Inc., which uses a volume-based cost system, produces cat condos that sell for $170 each. Direct materials cost $21 per unit, and direct labor costs $17 per unit. Manufacturing overhead is applied at a rate of 200% of direct labor cost. Nonmanufacturing costs are $28 per unit. What is the gross profit margin for the cat condos? (Round your intermediate calculations to nearest whole dollar.)---**Multiple Choice Options:**- 58.8%- 57.6%- 41.3%- 41.2%---**Explanation:**To determine the gross profit margin, we need to calculate the total cost per unit and subtract it from the selling price.**Steps to Calculate:**1. **Direct Material Cost:** $212. **Direct Labor Cost:** $173. **Manufacturing Overhead Cost:** 200% of Direct Labor Cost - Calculation: 200% of $17 = 2 * $17 = $344. **Total Manufacturing Cost per Unit:** - Direct Material + Direct Labor + Manufacturing Overhead - $21 + $17 + $34 = $725. **Selling Price per Unit:** $1706. **Gross Profit per Unit:** - Selling Price - Total Manufacturing Cost - $170 - $72 = $98Calculate the gross profit margin as a percentage of the selling price:\[ \text{Gross Profit Margin} = \left(\frac{\text{Gross Profit per Unit}}{\text{Selling Price per Unit}}\right) \times 100 \]\[ \text{Gross Profit Margin} = \left(\frac{98}{170}\right) \times 100 \approx 57.6\% \]Therefore, the correct answer is **57.6%**.

Manufacturing cost per unit: Direct materials $21 Direct labor $17 Manufacturing…

Saved Lincoln, Inc., which uses a volume-based cost system, produces cat condos that sell for $170 each, Direct materials cost $21 per unit, and direct labor costs $17 per unit. Manufacturing overhead is appliled at a rate of 200% of direct labor cost. Nonmanufacturing costs are $28 per unit. What is the gross profit margin for the cat condos? (Round your Intermedlate calculations to nearest whole dollar.)

Saved Lincoln, Inc., which uses a volume-based cost system, produces cat condos that sell for $170 each, Direct materials cost $21 per unit, and direct labor costs $17 per unit. Manufacturing overhead is appliled at a rate of 200% of direct labor cost. Nonmanufacturing costs are $28 per unit. What is the gross profit margin for the cat condos? (Round your Intermedlate calculations to nearest whole dollar.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Ritchie Manufacturing Company makes a product that it sells for $180 per unit. The company incurs variable manufacturing costs of $100 per unit. Variable selling expenses are $17 per unit, annual fixed manufacturing costs are $460,000, and fixed selling and administrative costs are $195,200 per year. Required Determine the break-even point in units and dollars using each of the following approaches: a. Use the equation method. b. Use the contribution margin per unit approach. c. Use the contribution margin ratio approach. d. Prepare a contribution margin income statement for the break-even sales volume. Complete this question by entering your answers in the tabs below. Req A to C Req D Determine the break-even point in units and dollars using the equation method, the contribution margin per unit approach and the contribution margin ratio approach. a. Break-even point in units a. Break-even point in dollars b. Contribution margin per unit b. Break-even point in units b. Break-even point…
Denger
Business Solutions sells upscale modular desk units (60% of sales) and office chairs (40% of sales). Selling prices are $1,340 per desk unit and $590 per chair. Variable costs are $805 per desk unit and $295 per chair. Fixed costs are $171,210.Required:1. Compute the weighted-average contribution margin.2. Compute the break-even point in units.3. Compute the number of units of each product that would be sold at the break-even point.
Bonita Industries produces tinted SPF 100 moisturizer that it sells for $120 each. Each bottle costs $6 of variable costs to make. During the most recent quarter, 1100 bottles of moisturizer were manufactured and sold. Fixed costs for the quarter were $20 per unit for a total of $22000. What is the company's contribution margin ratio?
Morning Dove Company manufactures one model of birdbath, which is very popular. Morning Dove sells all units it produces each month. The relevant range is 0-1,900 units, and monthly production costs for the production of 1,600 units follow. Morning Dove's utilities and maintenance costs are mixed with the fixed components shown in parentheses. Suppose it sells each birdbath for $24. Calculate the unit contribution margin and contribution margin ratio for each birdbath sold. Complete the contribution margin income statement assuming that Morning Dove produces and sells 1,800 units.
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?
Ritchie manufacturing company makes a product that it sells for $170 per unit. The company incurs variable manufacturing costs of $86 per unit variable selling expenses are 416 per unit, annual fixed manufacturing costs are $458,000, and fixed selling and administrative costs are $242,400 per year. Required Determine the break-even point in units and dollars using each of the following approaches: a) use the equation method b) use the contribution margin per unit approach c) prepare a contribution margin income statement for the break-even sales volume.
Ritchie Manufacturing Company makes a product that it sells for $150 per unit. The company incurs variable manufacturing costs of $60 per unit. Variable selling expenses are $18 per unit, annual fixed manufacturing costs are $ 480,000, and fixed selling and administrative costs are $240, 000 per year. Required: Determine the break-even point in units and dollars using each of the following approaches: a. Use the equation method. b. Use the contribution margin per unit approach. c. Use the contribution margin ratio approach. d. Confirm your results by preparing a contribution margin income statement in excel for the break - even sales volume.
Surf Company can sell all of the two surfboard models it produces, but it has only 424 direct labor hours available. The Glide model requires 2 direct labor hours per unit. The Ultra model requires 4 direct labor hours per unit. Contribution margin per unit is $224 for Glide and $348 for Ultra. (a) Compute the contribution margin per direct labor hour for each product. (b) Determine the best sales mix and the resulting contribution margin. Complete this question by entering your answers in the tabs below. Required A Required B Compute the contribution margin per direct labor hour for each product. Glide Ultra Contribution margin per direct labor hour
Surf Company can sell all of the two surfboard models it produces, but it has only 416 direct labor hours available. The Glide model requires 2 direct labor hours per unit. The Ultra model requires 4 direct labor hours per unit. Contribution margin per unit is $216 for Glide and $332 for Ultra. (a) Compute the contribution margin per direct labor hour for each product. (b) Determine the best sales mix and the resulting contribution margin. Complete this question by entering your answers in the tabs below. Required A Required B Compute the contribution margin per direct labor hour for each product. Glide Ultra Contribution margin per direct labor hour $ $
Times interest earned A company reports the following: Income before income tax $1,108,800 Interest expense 112,000 Determine the times interest earned ratio. If required, round the answer to one decimal place.
Surf Company can sell all of the two surfboard models it produces, but it has only 400 direct labor hours available. The Glide model requires 2 direct labor hours per unit. The Ultra model requires 4 direct labor hours per unit. Contribution margin per unit is $200 for Glide and $300 for Ultra. (e) Compute the contribution margin per direct labor hour for each product. (b) Determine the best sales mix and the resulting contribution margin. Complete this question by entering your answers in the tabs below. Required A Required B Compute the contribution margin per direct labor hour for each product. Contribution margin per direct labor hour Glide Ultra Required B > D