Concept Introduction:
Contribution approach:
The contribution approach calculates the net profit by calculating the contribution margin. The variable cost is deducted from the sales value to calculate the contribution margin. Further, the fixed cost is deducted from the contribution margin to calculate the contribution margin.
Requirement 1:
Calculate the contribution margin per minute for all the products.
Concept Introduction:
Differential analysis:
Differential analysis is an accounting technique that is used to analyze the change in the revenue and cost of the business resulting from some specific decision making. It analyses the cost of accepting one business offer over other business offers.
Requirement 2:
Determine the most profitable product for the plastic injection molding machine.
Concept Introduction:
Contribution approach:
The contribution approach calculates the net profit by calculating the contribution margin. The variable cost is deducted from the sales value to calculate the contribution margin. Further, the fixed cost is deducted from the contribution margin to calculate the contribution margin.
Requirement 3:
Calculate the contribution margin per pound for all the products.
Concept Introduction:
Differential analysis:
Differential analysis is an accounting technique that is used to analyze the change in the revenue and cost of the business resulting from some specific decision making. It analyses the cost of accepting one business offer over other business offers.
Requirement 4:
Determine the most profitable product for the use of the plastic pellet.
Concept Introduction:
Contribution approach:
The contribution approach calculates the net profit by calculating the contribution margin. The variable cost is deducted from the sales value to calculate the contribution margin. Further, the fixed cost is deducted from the contribution margin to calculate the contribution margin.
Requirement 5:
Determine the largest contribution margin per unit and explain the reason behind its ineffectiveness use.
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Chapter 6 Solutions
Loose Leaf For Managerial Accounting for Managers
- On December 31, 2023, Berclair Incorporated had 360 million shares of common stock and 12 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2024, Berclair purchased 40 million shares of its common stock as treasury stock. Berclair issued a 5% common stock dividend on July 1, 2024. • Four million treasury shares were sold on October 1. . Net income for the year ended December 31, 2024, was $600 million. Also outstanding at December 31 were 60 million incentive stock options granted to key executives on September 13, 2019. The options were exercisable as of September 13, 2023, for 60 million common shares at an exercise price of $60 per share. During 2024, the market price of the common shares averaged $80 per share. The options were exercised on September 1, 2024. Required: Compute Berclair's basic and diluted earnings per share for the year ended December 31, 2024. (Shares for stock options and conversion of convertible securities have…arrow_forwardLogan product computes it's predetermined overhead rate solution this questionarrow_forwardANSWERarrow_forward
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