Fundamental Accounting Principles
24th Edition
ISBN: 9781259916960
Author: Wild, John J., Shaw, Ken W.
Publisher: Mcgraw-hill Education,
expand_more
expand_more
format_list_bulleted
Question
Chapter 21, Problem 21SP
To determine
Introduction:
Break Even Sales is very useful for determining the level at which organization is able to recover all its fixed expenses. Sometime when sales comprises of combination of products − then we have to calculate the Selling price of the standard Mix and calculate Break Even sales for the Selling price / contribution of the standard Mix.
To Calculate:
We are required to calculate the Variable Cost of composite Unit.
Expert Solution
Answer to Problem 21SP
Solution
The Variable Cost of Composite units is $ 2750
Explanation of Solution
Explanation:
The calculations are given here:
| Business Solutions | ||||||
| Answer S. No. | Details | Desk | Chair | Value Composite unit | ||
| | | $ | No. | $ | No. | $ |
| | Selling Price | 1250 | | 500 | | |
| | | | | | | |
| | Selling Qty | | 3 | | 2 | 5 |
| | | | | | | |
| 1 | Sales Price Per composite unit | | | | | 4750 |
| | | | | | | |
| | Variable Cost Per Unit | 750 | | 250 | | |
| | | | | | | |
| | Units | | 3 | | 2 | 5 |
| | | | | | | |
| 2 | Variable Cost Per Composite Unit | | | | | 2750 |
| | | | | | | |
| | Contribution per Composite Unit | | | | | 2000 |
| | | | | | | |
| | Fixed Expenses | | | | | 120000 |
| | | | | | | |
| 3 | No of Composite Units to break even | | | | | 60 |
| | | | | | | |
| 4.1 | Sales of Desk | 60*3 | 180 | | | |
| | | | | | | |
| 4.2 | Sales of Chair | 60*2 | | | 120 | |
Conclusion
Conclusion: Variable Cost of Composite unit is $ 2750.
To determine
Introduction:
Break Even Sales is very useful for determining the level at which organization is able to recover all its fixed expenses. Sometime when sales comprises of combination of products − then we have to calculate the Selling price of the standard Mix and calculate Break Even sales for the Selling price / contribution of the standard Mix.
To Calculate:
We are required to calculate the Break Even Point in composite Unit.
Expert Solution
Answer to Problem 21SP
Solution
The Break even point in Composite unit is 60 Units.
Explanation of Solution
Explanation:
The calculations are given here:
| Business Solutions | ||||||
| Answer S. No. | Details | Desk | Chair | Value Composite unit | ||
| | | $ | No. | $ | No. | $ |
| | Selling Price | 1250 | | 500 | | |
| | | | | | | |
| | Selling Qty | | 3 | | 2 | 5 |
| | | | | | | |
| 1 | Sales Price Per composite unit | | | | | 4750 |
| | | | | | | |
| | Variable Cost Per Unit | 750 | | 250 | | |
| | | | | | | |
| | Units | | 3 | | 2 | 5 |
| | | | | | | |
| 2 | Variable Cost Per Composite Unit | | | | | 2750 |
| | | | | | | |
| | Contribution per Composite Unit | | | | | 2000 |
| | | | | | | |
| | Fixed Expenses | | | | | 120000 |
| | | | | | | |
| 3 | No of Composite Units to break even | | | | | 60 |
| | | | | | | |
| 4.1 | Sales of Desk | 60*3 | 180 | | | |
| | | | | | | |
| 4.2 | Sales of Chair | 60*2 | | | 120 | |
Conclusion
Conclusion: Break Even Point in composite units is 60 Units.
To determine
Introduction:
Break Even Sales is very useful for determining the level at which organization is able to recover all its fixed expenses. Sometime when sales comprises of combination of products − then we have to calculate the Selling price of the standard Mix and calculate Break Even sales for the Selling price / contribution of the standard Mix.
To Calculate:
We are required to calculate the Number of units sold for each product to achieve break Even.
Expert Solution
Answer to Problem 21SP
Solution
We are required to sell 180 units of Desk and 120 units of Chair to achieve Break Even.
Explanation:
The calculations are given here:
| Business Solutions | ||||||
| Answer S. No. | Details | Desk | Chair | Value Composite unit | ||
| | | $ | No. | $ | No. | $ |
| | Selling Price | 1250 | | 500 | | |
| | | | | | | |
| | Selling Qty | | 3 | | 2 | 5 |
| | | | | | | |
| 1 | Sales Price Per composite unit | | | | | 4750 |
| | | | | | | |
| | Variable Cost Per Unit | 750 | | 250 | | |
| | | | | | | |
| | Units | | 3 | | 2 | 5 |
| | | | | | | |
| 2 | Variable Cost Per Composite Unit | | | | | 2750 |
| | | | | | | |
| | Contribution per Composite Unit | | | | | 2000 |
| | | | | | | |
| | Fixed Expenses | | | | | 120000 |
| | | | | | | |
| 3 | No of Composite Units to break even | | | | | 60 |
| | | | | | | |
| 4.1 | Sales of Desk | 60*3 | 180 | | | |
| | | | | | | |
| 4.2 | Sales of Chair | 60*2 | | | 120 | |
Conclusion: We need to sell 180 Units of Modular Desk and 120 units of Office Chairs to achieve break even.
Explanation of Solution
Explanation:
The calculations are given here:
| Business Solutions | ||||||
| Answer S. No. | Details | Desk | Chair | Value Composite unit | ||
| | | $ | No. | $ | No. | $ |
| | Selling Price | 1250 | | 500 | | |
| | | | | | | |
| | Selling Qty | | 3 | | 2 | 5 |
| | | | | | | |
| 1 | Sales Price Per composite unit | | | | | 4750 |
| | | | | | | |
| | Variable Cost Per Unit | 750 | | 250 | | |
| | | | | | | |
| | Units | | 3 | | 2 | 5 |
| | | | | | | |
| 2 | Variable Cost Per Composite Unit | | | | | 2750 |
| | | | | | | |
| | Contribution per Composite Unit | | | | | 2000 |
| | | | | | | |
| | Fixed Expenses | | | | | 120000 |
| | | | | | | |
| 3 | No of Composite Units to break even | | | | | 60 |
| | | | | | | |
| 4.1 | Sales of Desk | 60*3 | 180 | | | |
| | | | | | | |
| 4.2 | Sales of Chair | 60*2 | | | 120 | |
Conclusion
Conclusion: We need to sell 180 Units of Modular Desk and 120 units of Office Chairs to achieve break even.
Want to see more full solutions like this?
Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
I am looking for the correct answer to this financial accounting problem using valid accounting standards.
I am trying to find the accurate solution to this financial accounting problem with appropriate explanations.
Please provide the answer to this general accounting question using the right approach.
Chapter 21 Solutions
Fundamental Accounting Principles
Ch. 21 - Prob. 1DQCh. 21 - Prob. 2DQCh. 21 - Prob. 3DQCh. 21 - Prob. 4DQCh. 21 - Prob. 5DQCh. 21 - Prob. 6DQCh. 21 - Prob. 7DQCh. 21 - Prob. 8DQCh. 21 - Prob. 9DQCh. 21 - Prob. 10DQ
Ch. 21 - Prob. 11DQCh. 21 - List three methods to measure cost behavior.Ch. 21 - Prob. 13DQCh. 21 - Prob. 14DQCh. 21 - Prob. 15DQCh. 21 - Prob. 16DQCh. 21 - Prob. 17DQCh. 21 - Prob. 18DQCh. 21 - Prob. 19DQCh. 21 - Prob. 20DQCh. 21 - Prob. 21DQCh. 21 - Prob. 22DQCh. 21 - Cost behavior identification C1 Listed here are...Ch. 21 - QS 21-2
Cost behavior identification
c1 ...Ch. 21 - QS 21-3 Cost behavior estimation—high-low method...Ch. 21 - Prob. 4QSCh. 21 - Prob. 5QSCh. 21 - Prob. 6QSCh. 21 - Prob. 7QSCh. 21 - Prob. 8QSCh. 21 - Prob. 9QSCh. 21 - Prob. 10QSCh. 21 - Prob. 11QSCh. 21 - Prob. 12QSCh. 21 - Prob. 13QSCh. 21 - Prob. 14QSCh. 21 - Prob. 15QSCh. 21 - Prob. 16QSCh. 21 - Prob. 17QSCh. 21 - Prob. 18QSCh. 21 - Prob. 19QSCh. 21 - Prob. 20QSCh. 21 - Prob. 21QSCh. 21 - Prob. 1ECh. 21 - Prob. 2ECh. 21 - Prob. 3ECh. 21 - Prob. 4ECh. 21 - Prob. 5ECh. 21 - Prob. 6ECh. 21 - Prob. 7ECh. 21 - Prob. 8ECh. 21 - Prob. 9ECh. 21 - Prob. 10ECh. 21 - Prob. 11ECh. 21 - Prob. 12ECh. 21 - Prob. 13ECh. 21 - Prob. 14ECh. 21 - Prob. 15ECh. 21 - Prob. 16ECh. 21 - Prob. 17ECh. 21 - Prob. 18ECh. 21 - Prob. 19ECh. 21 - Prob. 20ECh. 21 - Prob. 21ECh. 21 - Prob. 22ECh. 21 - Prob. 23ECh. 21 - Prob. 24ECh. 21 - Prob. 25ECh. 21 - Prob. 26ECh. 21 - Prob. 27ECh. 21 - Prob. 1APSACh. 21 - Prob. 2APSACh. 21 - Prob. 3APSACh. 21 - Prob. 4APSACh. 21 - Prob. 5APSACh. 21 - Prob. 6APSACh. 21 - Prob. 7APSACh. 21 - Prob. 1BPSBCh. 21 - Prob. 2BPSBCh. 21 - Prob. 3BPSBCh. 21 - Prob. 4BPSBCh. 21 - Prob. 5BPSBCh. 21 - Prob. 6BPSBCh. 21 - Prob. 7BPSBCh. 21 - Prob. 21SPCh. 21 - Prob. 2AACh. 21 - Prob. 3AACh. 21 - Labor costs of an auto repair mechanic are seldom...Ch. 21 - Prob. 2BTNCh. 21 - Prob. 4BTNCh. 21 - Prob. 6BTN
Knowledge Booster
Similar questions
- Henderson Corporation uses the calendar year as its tax year. It acquires and places into service two depreciable assets during 2024: • Asset #1: 7-year property; $940,000 cost; placed into service on January 20. Asset #2: 5-year property; $410,000 cost; placed into service on August 1. View the MACRS half-year convention rates. Read the requirements. Calculate Henderson's depreciation deductions for 2024. (Use MACRS rates to two decimal places, X.XX%. Round the MACRS depreciation to the nearest dollar.) 2024 Depreciation Asset #1 Asset #2 Total depreciation 134,326 82,000 216,326 Calculate Henderson's depreciation deductions for 2025. (Use MACRS rates to two decimal places, X.XX%. Round the MACRS depreciation to the nearest dollar.) 2025 Depreciation Asset #1 Asset #2 Total depreciation 230,206 131,200 361,406 b. What are Henderson's depreciation deductions for 2024 and 2025 if this is the only property it places into service in those years and Henderson elects Sec. 179 expensing for…arrow_forwardPlease explain the solution to this general accounting problem with accurate principles.arrow_forwardHenderson Corporation uses the calendar year as its tax year. It acquires and places into service two depreciable assets during 2024: • Asset #1: 7-year property; $940,000 cost; placed into service on January 20. Asset #2: 5-year property; $410,000 cost; placed into service on August 1. View the MACRS half-year convention rates. Read the requirements. Calculate Henderson's depreciation deductions for 2024. (Use MACRS rates to two decimal places, X.XX%. Round the MACRS depreciation to the nearest dollar.) 2024 Depreciation Asset #1 Asset #2 Total depreciation 134,326 82,000 216,326 Calculate Henderson's depreciation deductions for 2025. (Use MACRS rates to two decimal places, X.XX%. Round the MACRS depreciation to the nearest dollar.) 2025 Depreciation Asset #1 Asset #2 Total depreciation 230,206 131,200 361,406 b. What are Henderson's depreciation deductions for 2024 and 2025 if this is the only property it places into service in those years and Henderson elects Sec. 179 expensing for…arrow_forward
- Carlyon Company listed the following items in its December 31, Year 1, financial statements: Investment in Man Company bonds $21,000 Dividends payable: preferred 4,000 Dividends payable: common 50,000 Preferred stock, 8%, $100 par 100,000 Common stock, $10 par 500,000 Additional paid-in capital on preferred stock 20,000 Additional paid-in capital on common stock 262,500 Retained earnings 270,000 During Year 2, the following transactions occurred: Feb. 2 Paid the semiannual dividends declared on December 15, Year 1. Mar. 5 Declared a property dividend, payable to common shareholders on April 5 in Man Company bonds being held to maturity. The bonds (which have a book value of $21,000) have a current market value of $30,000. Apr. 5 Paid the property dividend. Jul. 6 Declared a $4 per share semiannual cash dividend on preferred stock and a $1.10 per share semiannual dividend on common stock, to be paid on August 17. Aug. 17 Paid the cash dividends.…arrow_forwardRequired information [The following information applies to the questions displayed below.] Jarvie loves to bike. In fact, he has always turned down better-paying jobs to work in bicycle shops where he gets an employee discount. At Jarvie's current shop, Bad Dog Cycles, each employee is allowed to purchase four bicycles a year at a discount. Bad Dog has an average gross profit percentage on bicycles of 25 percent. During the current year, Jarvie bought the following bikes: Description Retail Price Specialized road bike $ 4,000 Cost $ 3,600 Employee Price $ 2,800 Rocky Mountain mountain bike 5,000 4,100 4,000 Trek road bike 3,900 3,300 2,730 Yeti mountain bike 4,600 3,400 3,680 b. What amount of deductions is Bad Dog allowed to claim from these transactions? Amount of deductionsarrow_forwardJarvie loves to bike. In fact, he has always turned down better-paying jobs to work in bicycle shops where he gets an employee discount. At Jarvie's current shop, Bad Dog Cycles, each employee is allowed to purchase four bicycles a year at a discount. Bad Dog has an average gross profit percentage on bicycles of 25 percent. During the current year, Jarvie bought the following bikes: Description Retail Price Specialized road bike $ 4,000 Cost $ 3,600 Employee Price $ 2,800 Rocky Mountain mountain bike 5,000 4,100 4,000 Trek road bike 3,900 3,300 2,730 Yeti mountain bike 4,600 3,400 3,680 a. What amount is Jarvie required to include in taxable income from these purchases? Amount to be includedarrow_forward
- Yost received 300 NQOs (each option gives Yost the right to purchase 10 shares of Cutter Corporation stock for $19 per share). At the time he started working for Cutter Corporation three years ago, Cutter's stock price was $19 per share. Yost exercised all of his options when the share price was $38 per share. Two years after acquiring the shares, he sold them at $59 per share. Note: Input all amounts as positive values. Leave no answer blank. Enter zero if applicable. d. Assume that Yost's options were exercisable at $24 and expired after five years. If the stock only reached $22 during its high point during the five-year period, what are Yost's tax consequences on the grant date, the exercise date, and the date the shares are sold, assuming his ordinary marginal rate is 35 percent and his long-term capital gains rate is 15 percent? Grant date Exercise date Taxes Due Sale datearrow_forwardMark received 10 ISOs (each option gives him the right to purchase 14 shares of Hendricks Corporation stock for $6 per share) at the time he started working for Hendricks Corporation five years ago, when Hendricks's stock price was $5 per share. Now that Hendricks's share price is $35 per share, Mark intends to exercise all of his options and hold all of his shares for more than one year. Assume that more than a year after exercise, Mark sells the stock for $35 a share. Note: Enter all amounts as positive values. Leave no answers blank. Enter zero if applicable. b. What are Hendricks's tax consequences on the grant date, the exercise date, and the date Mark sells the shares? Grant date Exercise date Sale date Tax Benefitarrow_forwardYost received 300 NQOs (each option gives Yost the right to purchase 10 shares of Cutter Corporation stock for $19 per share). At the time he started working for Cutter Corporation three years ago, Cutter's stock price was $19 per share. Yost exercised all of his options when the share price was $38 per share. Two years after acquiring the shares, he sold them at $59 per share. Note: Input all amounts as positive values. Leave no answer blank. Enter zero if applicable. c. Assume that Yost is "cash poor" and needs to engage in a same-day sale in order to buy his shares. Due to his belief that the stock price is going to increase significantly, he wants to maintain as many shares as possible. How many shares must he sell in order to cover his purchase price and taxes payable on the exercise? Number of shares to be soldarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education