Witrox Bhd sells two models of smartphone, the Oppo and the Xiaomi.OppoRM60.035.025.0Sales price per unitVariable cost per unitContribution margin per unitWitrox has determined that it would break even at an annual sales volume of 50,000 units, ofwhich 75% would be Oppo.Required:a) What are the contribution margin ratios for each product and the company?b) What is the amount of Witrox's estimated annual fixed costs?XiaomiRM85.054.031.0c) What is the sales mix?d) Prepare a product line income statement with operating income of RM500,000. Fixedproduction costs will increase RM45,000 and fixed administrative costs will increaseRM22,500 to support the increase in volume.

Lets understand the basics.MARGINAL COSTING INCOME STATEMENT Marginal Costing Income Statement is…

Witrox Bnd sells two models of smartphone, the Oppo and the Xiaomi. Oppo RM 60.0 35.0 25.0 Sales price per unit Variable cost per unit Contribution margin per unit Xiaomi RM 85.0 54.0 31.0 Witrox has determined that it would break even at an annual sales volume of 50,000 units, of which 75% would be Oppo.

Witrox Bnd sells two models of smartphone, the Oppo and the Xiaomi. Oppo RM 60.0 35.0 25.0 Sales price per unit Variable cost per unit Contribution margin per unit Xiaomi RM 85.0 54.0 31.0 Witrox has determined that it would break even at an annual sales volume of 50,000 units, of which 75% would be Oppo.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Pricing

Pricing is used as a term in finance and economics, pricing is the process of fixing a value for a product or a service. Pricing establishes a value for a product or service that the customer has to pay. A business can choose from different strategies while deciding to set prices.

Question

Witrox Bhd sells two models of smartphone, the Oppo and the Xiaomi.
Oppo
RM
60.0
35.0
25.0
Sales price per unit
Variable cost per unit
Contribution margin per unit
Witrox has determined that it would break even at an annual sales volume of 50,000 units, of
which 75% would be Oppo.
Required:
a) What are the contribution margin ratios for each product and the company?
b) What is the amount of Witrox's estimated annual fixed costs?
Xiaomi
RM
85.0
54.0
31.0
c) What is the sales mix?
d) Prepare a product line income statement with operating income of RM500,000. Fixed
production costs will increase RM45,000 and fixed administrative costs will increase
RM22,500 to support the increase in volume.

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