StandardDeluxePro$180.00Selling price per video playerVariable expenses per video player:$80.00$120.00$ 54.00$ 12.00$ 63.00$ 18.00Production$44.00Selling (10% of selling price) $ 8.00All sales are made through the company's own retail outlets. The VideoDivision has the following fixed costs:Per MonthFixedproduction$90,000costsAdvertising75,000expenseAdministrative37,500salariesTotal$202,500Sales, in units, over the past two months have been as follows: Standard DeluxeProTotalApril 1,0003,7502,5001,5005004,0006,000Мay750Required:1-a. Prepare contribution format income statements for April.1-b. Prepare contribution format income statements for May2-Compute the Video Division's break-even point in dollar sales for April.3-Assume that sales of the Standard video player increase by $35,000. Whatwould be the effect on operating income? What would be the effect if Provideo player sales increased by $35,000? Do not prepare income statements;use the incremental analysis approach in determining your answer.4-Increase in Operating Income:

Standard Deluxe Pro Selling price per video player Variable expenses per video player: $80.00 $120.00 $180.00 Production Selling (10% of selling price) $ 8.00 $ 54.00 $ 12.00 $ 63.00 $ 18.00 $44.00 All sales are made through the company's own retail outlets. The Video Division has the following fixed costs: Per Month Fixed production 90,000 costs Advertising 75,000 expense Administrative 37,500 salaries Total 202,500 Sales, in units, over the past two months have been as follows:

Standard Deluxe Pro Selling price per video player Variable expenses per video player: $80.00 $120.00 $180.00 Production Selling (10% of selling price) $ 8.00 $ 54.00 $ 12.00 $ 63.00 $ 18.00 $44.00 All sales are made through the company's own retail outlets. The Video Division has the following fixed costs: Per Month Fixed production 90,000 costs Advertising 75,000 expense Administrative 37,500 salaries Total 202,500 Sales, in units, over the past two months have been as follows:

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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FRANCORP sells two products. Products M N Selling price per unit $80 $60 Less variable expenses per unit $46 $40 Contribution margin per unit $34 $20 Current demand per week (units) 2,100 2,400 Processing time required on machine XYZ per unit 2 min. 1 min. Machine XYZ is a constrained resource and is being used at 100% capacity. Machine XYZ has a capacity of 3,000 minutes per week. Assuming FRANCORP wants to maximize its total contribution margin, how much of each product should it produce? a. 2400 units of N and 300 units of M b. 300 units of N and 2100 units of M c. 1200 units of N and 1050 units of M d. 2400 units of N and 0 units of M
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d
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International Printer Machines (IPM) builds three computer printer models: Alpha, Beta, andGamma. Information for these three products is as follows:Alpha Beta Gamma TotalSelling price per unit $250 $400 $1 500Variable cost per unit $80 $200 $800Expected unit sales (annual) 12,000 6,000 2,000 20,000Sales mix 50 percent 40 percent 10 percent 100 percentTotal annual fixed costs are $5,000,000. Assume the sales mix remains the same at all levelsof sales.Required:a) Calculate the weighted average unit contribution margin, assuming a constant sales mix. b) How many units of each printer must be sold to break even? (3 marks)c) i) Explain what is margin of safety ii) Calculate in sales units the margin of safety for IPM, assuming projected sales are25,000 units?