Wool Co manufactures three products: hats, scarves and gloves. The products are sold in the ratio of 3:2:5 and all products have a selling price of $50.Contribution per unit for each of the products is as follows:HatsScarvesGloves$203025Wool Co's fixed costs per year are 800,000 and it has budgeted to make a profit of $57,500.How much sales revenue must Wool Co generate in order to achieve its target profit (to the nearest $'000)?Select...Select...$1,750,000$1,633,000$1,715,000$1,600,000

To calculate the sales revenue Wool Co must generate to achieve its target profit, we need to…

Answered: Wool Co manufactures three products:…

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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Sunland, Inc., sells two types of water pitchers, plastic and glass. Plastic pitchers cost the company $25 and are sold for $35. Glass pitchers cost $24 and are sold for $45. All other costs are fixed at $572,000 per year. Current sales plans call for 14,000 plastic pitchers and 28,000 glass pitchers to be sold in the coming year.
CVPAustin Automotive sells an auto accessory for $180 per unit. The company’s variable cost per unit is $30 for direct material, $25 per unit for direct labor, and $17 per unit for overhead. Annual fixed production overhead is $52,360, and fixed selling and administrative overhead is $35,336. If Austin Automotive wants to earn a pre-tax profit of $72,576, how many units must the company sell?
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Carla Vista Company purchases sails and produces sailboats. It currently produces 1,250 sailboats per year, operating at normal capacity, which is about 80% of full capacity. Carla Vista purchases sails at $262 each, but the company is considering using the excess capacity to manufacture the sails instead. The manufacturing cost per sail would be $94 for direct materials, $84 for direct labor, and $90 for overhead. The $90 overhead is based on $77,500 of annual fixed overhead that is allocated using normal capacity. The president of Carla Vista has come to you for advice. "It would cost me $268 to make the sails," she says, "but only $262 to buy them. Should I continue buying them, or have I missed something?" (a) Prepare a per unit analysis of the differential costs. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Direct material Direct labor Variable overhead Purchase price Total unit cost Make Sails Carla Vista should tA…
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