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Exercise 25-6 Sales mix determination and analysis P3
Colt Company owns a machine that can produce two specialized products. Production time for Product TLX is two units per hour and for Product MTV is five units per hour. The machine's capacity is 2,750 hours per year. Both products are sold to a single customer who has agreed to buy all of the company's output up to a maximum of 4,700 units of Product TLX and 2,500 units of Product MTV. Selling prices and variable costs per unit to produce the products follow. Determine (1) the company's most profitable sales mix and (2) the contribution margin that results from that sales mix.
$ Per unit
product TLX
Product MTV
Selling price per unit.......................... $15.00 $9.50
Variable costs per unit......................... 4.80 5.50
Check (2) $55,940
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Chapter 25 Solutions
Fundamental Accounting Principles
- QS 15-18 (Algo) Computing and recording over- or underapplied overhead LO P4 A company applies overhead at a rate of 170% of direct labor cost. Actual overhead cost for the current period is $1,081,900, and direct labor cost is $627,000. 1. Compute the under- or overapplied overhead. 2. Prepare the journal entry to close over- or underapplied overhead to Cost of Goods Sold. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the under- or overapplied overhead.arrow_forwardQuestion 6 During 2019, Bitsincoins Corporation had EBIT of $100,000, a change in net fixed assets of $400,000, an increase in net current assets of $100,000, an increase in spontaneous current liabilities of $400,000, a depreciation expense of $50,000, and a tax rate of 30%. Based on this information, what is Bitsincoin's free cash flow? (3 marks)arrow_forwardQuestion 4 Waterfront Inc. wishes to borrow on a short-term basis without reducing its current ratio below 1.25. At present its current assets and current liabilities are $1,600 and $1,000 respectively. How much can Waterfront Inc. borrow? (5 marks)arrow_forward
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