Stratford Company distributes a lightweight lawn chair that sells for $30 per unit. Variable expenses are 40% of saexpenses total $526,500 annuallyRequired:Answer the following independent questions:1. What is the product's CM per unit?Contribution margin per unit

Contribution in variable costing is the amount which is determined by the entity by deducting the…

Answered: Stratford Company distributes a…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 20E

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Polaris Inc. manufactures two types of metal stampings for the automobile industry: door handles and trim kits. Fixed cost equals 146,000. Each door handle sells for 12 and has variable cost of 9; each trim kit sells for 8 and has variable cost of 5. Required: 1. What are the contribution margin per unit and the contribution margin ratio for door handles and for trim kits? 2. If Polaris sells 20,000 door handles and 40,000 trim kits, what is the operating income? 3. How many door handles and how many trim kits must be sold for Polaris to break even? 4. CONCEPTUAL CONNECTION Assume that Polaris has the opportunity to rearrange its plant to produce only trim kits. If this is done, fixed costs will decrease by 35,000, and 70,000 trim kits can be produced and sold. Is this a good idea? Explain.
subquestion 1, 2 and 3
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SBD Phone Company sells its waterproof phone case for $122 per unit. Fixed costs total $262,000, and variable costs are $52 per unit. Compute the units of product that must be sold to earn pretax income of $228,000. Units to be sold to achieve targeted income Choose Numerator: Choose Denominator: Units to Achieve Target Units to achieve target II
Calculate the number of helmets Head-First must sell to earn operating income of $81,900. _____________helmets Refer to the list below for the exact wording of text items within your income statement. Amount Descriptions Operating income Operating loss Sales Total contribution margin Total fixed cost Total variable cost Units to Earn Target Income Head-First Company plans to sell 5,000 bicycle helmets at $75 each in the coming year. Unit variable cost is $45 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals $49,500 (includes fixed factory overhead and fixed selling and administrative expense). Required: 1. Calculate the number of helmets Head-First must sell to earn operating income of $81,900. 2. Check your answer by preparing a contribution margin income statement based on the number of units calculated
Atlantic Manufacturing produces and sells children’s bikes at an average price of $80. Its costs are as follows: direct materials = $15; direct labour = $7; variable overhead = $3; sales commission is 5% of price. Its fixed monthly costs are $50,000. Required: 1. Using the above cost data, set up a monthly cost equation. Y=___+___x 2. What is the company’s contribution margin percentage? (Round your answer to 2 decimal places.) Contribution Margin %
An entry light has a total cost of $125 per unit, of which 80 is product cost
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Royal Lawncare Company produces and sells two packaged products-Weedban and Greengrow. Revenue and cost informati relating to the products follow: Selling price per unit Variable expenses per unit Traceable fixed expenses per year Product Sales Variable expenses Weedban $ 9.00 $ 2.30 $ 131,000 Last year the company produced and sold 44,000 units of Weedban and 15,500 units of Greengrow. Its annual common fixed expenses are $109,000. Contribution margin Traceable fixed expenses Product line segment margin Common fixed expenses not traceable to products Net operating income Required: Prepare a contribution format income statement segmented by product lines. Greengrow $ 32.00 $ 10.00 $ 38,000 $ Total Company 0 Product Line 0 Weedban 0 $ 0 0 Greengrow $ 0 0 €
Feather Friends, Incorporated, distributes a high-quality wooden birdhouse that sells for $20 per unit. Variable expenses are $10 per unit, and fixed expenses total $190,000 per year. Its operating results for last year were as follows: Sales (23,000 units) Variable expenses Contribution margin Fixed expenses Operating income Required: Answer each question Independently based on the original data: 1. What is the product's CM ratio? 2. Use the CM ratio to determine the break-even point in sales dollars. 3. Assume this year's total sales increase by $40,000. If the fixed expenses do not change, how much will operating Income Increase? Assume that the operating results for last year were as in the question data. 4-a. Compute the degree of operating leverage based on last year's sales. 4-b. The president expects sales to increase by 16% next year. Using the degree of operating leverage from last year, what percentage Increase in operating Income will the company realize this year?…
Bright Force Inc. produces and sells lighting fixtures. An entry light has a total cost of $90 per unit, of which $50 is product cost and $40 is selling and administrative expenses. In addition, the total cost of $90 is made up of $55 variable cost and $35 fixed cost. The desired profit is $20 per unit. Determine the markup percentage on product cost. Round the answer to nearest whole number.

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Stratford Company distributes a lightweight lawn chair that sells for $30 per unit. Variable expenses are 40% of sa expenses total $526,500 annually. Required: Answer the following independent questions: 1. What is the product's CM per unit? Contribution margin per unit