The following information pertains to Catnip Company: Sales (25,000 units) $250,000 Manufacturing expenses: Variable 85,000 Fixed 17,500 Selling and general expenses: Variable 27,500 Fixed 14,950 Catnip's break-even point in number of units is:

The following information pertains to Catnip Company: Sales (25,000 units) $250,000 Manufacturing expenses: Variable 85,000 Fixed 17,500 Selling and general expenses: Variable 27,500 Fixed 14,950 Catnip's break-even point in number of units is:

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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At a volume of 20,000 units, Almount Industries reported sales revenues of $1,180,000, variable costs of $360,000, and fixed costs of $352,000. The company's contribution margin per unit is: A. None of the answers is correct. B. $36. C. $28. D. $41. E.$43.
A condensed income statement by product line for Crown Beverage Inc. indicated the following for King Cola for the past year: Sales $236,100 Cost of goods sold 112,000 Gross profit $124,100 Operating expenses 142,000 Loss from operations $(17,900) It is estimated that 13% of the cost of goods sold represents fixed factory overhead costs and that 21% of the operating expenses are fixed. Since King Cola is only one of many products, the fixed costs will not be materially affected if the product is discontinued. Question Content Area a. Prepare a differential analysis, dated March 3, to determine whether King Cola should be continued (Alternative 1) or discontinued (Alternative 2). If an amount is zero, enter zero "0". Use a minus sign to indicate a loss. Differential AnalysisContinue King Cola (Alt. 1) or Discontinue King Cola (Alt. 2)January 21 Continue KingCola (Alternative 1) Discontinue KingCola (Alternative 2) Differential Effecton Income(Alternative 2)…
Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 34,000 Rets per year. Costs associated with this level of production and sales are given below: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expense Fixed selling expense Total cost Unit $15 6 IN MING 3 1. 2. 3. 5 Financial advantage Financial (disadvantage) 2 6 $ 37 Total $ 510,000 204,000 The Rets normally sell for $42 each. Fixed manufacturing overhead is $170,000 per year within the range of 24,000 through 34,000 Rets per year. 102,000 170,000 68,000 204,000 $ 1,258,000 Required: 1. Assume that due to a recession, Polaski Company expects to sell only 24,000 Rets through regular channels next year. A large retail chain has offered to purchase 10,000 Rets if Polaski is willing to accept a 16% discount off the regular price. There would be no sales commissions on this order; thus, variable selling…
A condensed income statement by product line for British Beverage Inc. indicated the following for King Cola for the past year: Sales $235,100 Cost of goods sold 112,000 Gross profit $123,100 Operating expenses 145,000 Loss from operations $(21,900) It is estimated that 16% of the cost of goods sold represents fixed factory overhead costs and that 19% of the operating expenses are fixed. Since King Cola is only one of many products, the fixed costs will not be materially affected if the product is discontinued. a. Prepare a differential analysis, dated March 3, to determine whether to Continue King Cola (Alternative 1) or Discontinue King Cola (Alternative 2). If an amount is zero, enter zero "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential AnalysisContinue King Cola (Alt. 1) or Discontinue King Cola (Alt. 2)March 3 Continue KingCola (Alternative 1) Discontinue KingCola (Alternative 2) Differential…
Lattimer Company had the following results of operations for the past year: Contribution margin income statement Sales (18,000 units) Variable costs Direct materials Direct labor Overhead Contribution margin Fixed costs Fixed overhead Fixed selling and administrative expenses Income Multiple Choice O $6,000 profit. Per Unit $ 12.00 $4,000 loss. 1.50 4.00 1.00 5.50 1.00 1.40 $ 3.10 A foreign company offers to buy 6,000 units at $7.50 per unit. In addition to variable costs, selling these units would add a $0.25 selling expense for export fees. Lattimer's annual production capacity is 28,000 units. If Lattimer accepts this additional business, the special order will yield a: Annual Total $ 216,000 27,000 72,000 18,000 99,000 18,000 25, 200 $ 55,800
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Tyler Company has the following information pertaining to its two product lines for last year: Variable selling and admin. expenses Direct fixed expenses Sales Direct fixed selling and admin. expenses Variable expenses Operating income Common expenses are $105,000 for the year. What is the income for Tyler Company? $102,500 $120,500 $99,000 $101,000 Product A $38,000 19,500 250,000 38,000 42,000 $112,500 " Product B $31,000 34,500 210,000 22,000 31,000 $91,500
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During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: sales (@$64 per unit) Cost of goods sold (@ $39 per unit) Gross margin selling and administrative expenses* Net operating income *$3 per unit variable; $252,000 fixed each year. The company's $39 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($400,000 25,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: Units produced Units sold Year 1 25,000 20,000 Year 2 25,000 30,000 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Using variable costing, what is the unit product cost for both years? Unit product cost Required 3 Required: 1. Using variable costing, what is the unit product cost for both years? 2. What is the variable costing net operating Income In Year 1 and In Year 2? 3.…