Exercise 13-9A (Static) Using the contribution margin approachfor a special order decision LO 13-2Hensely Company, which produces and sells a small digital clock, bases its pricingstrategy on a 25 percent markup on total cost. Based on annual production costsfor 25,000 units of product, computations for the sales price per clock follow.Unit-level costsFixed costsTotal cost (a)Markup (a x 0.25)Total sales (b)Sales price per unit (b÷ 25,000)Required$240,00060,000300,00075,000$375,000$15a. Hensely has excess capacity and receives a special order for 8,000 clocks for$12 each. Calculate the contribution margin per unit. Based on this, shouldHensely accept the special order?b. Prepare a contribution margin income statement for the special order.Complete this question by entering your answers in the tabs below.Required A Required BHensely has excess capacity and receives a special order for 8,000 clocks for $12 eachunit. Based on this, should Hensely accept the special order?Note: Round your answer to 2 decimal places.Contribution margin per unitShould Hensely accept the special order?< Required ARequired B

Contribution means the difference between the selling price and variable cost. Break even point…

Answered: Exercise 13-9A (Static) Using the…

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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Exercise I-Set B Palawan Company must determine a target selling price for one of its products. Cost data relating to the product are as follows: Per Unit P 30 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable administrative and selling expenses 15 5 Fixed administrative and expenses 40 The costs above are based on an anticipated volume of 70,000 units produced and sold each period. The company uses cost-plus pricing, and it has a policy of obtaining target selling prices by adding a markup of 50% of unit manufacturing cost or by adding a markup of 80% of variable costs. Required: 1. Compute the target selling price per unit using absorption costing. 2. Compute the target selling price per unit using contribution costing.
G http Chapter Review My... Sales price Contribution margin ratio Fixed costs Tra.. Vernon Company reported the following data regarding the product it sells: a. Break-even point in dollars a. Break-even point in units b. Sales in dollars b. Sales in units c. Break-even point in dollars c. Break-even point in units $60 Man... $ 10% $216,000 M Questio... Required Use the contribution margin ratio approach and consider each requirement separately. b Ans... 2,160,000 36,000 Bes... Saved a. What is the break-even point in dollars? In units? b. To obtain a profit of $54,000, what must the sales be in dollars? In units? c. If the sales price increases to $72 and variable costs do not change, what is the new break-even point in dollars? In units? US fron.
Unit sales (a) Selling price per unit Variable cost per unit Traceable fixed expense TB MC Qu. 12A-46 Woodridge Corporation manufactures numerous... Woodridge Corporation manufactures numerous products, one of which is called Alpha-32. The company has provided the following data about this product Multiple Choice $1,375,220 77,000 76.00 61.00 $1,323,000 $52.220 Help $ $ Management is considering increasing the price of Alpha-32 by 5%, from $76.00 to $79.80. The company's marketing managers estimate that this price hike would decrease unit sales by 5%, from 77,000 units to 73,150 units Assuming that the total traceable fixed expense does not change, what net operating income will product Alpha-32 earn at a price of $79.80 if this sales forecast is correct? Save & Exit
Question #1 Which of the following factors should be considered in a make-or-buy decision A variable cost of manufacturing purchase price if item is bought outside fixed overhead that is directly traced to the item all of the above Question #2 How much sales are required to earn a target net income of P160,000 if total fixed costs are P200,000 and the contribution margin ratio is 40%? A) 510,000 B) 810,000 900,000 400,000
QUESTION 4 Exxarro Llimited is considering pricing and costing for the year ahead. The following data based on expected production and sales of 15 000 units are provided for analysis: Variable manufacturing cost Fixed manufacturing cost R1 185 000 R510 000 R5 per unit sold R130 000 Sales commission Fixed administration cost Sales R210 per unit Study the information provided above and answer the following questions independently: 4.1 Calculate the break-even sales value. 4.2 Calculate the sales volume required to achieve a profit of R 800 000. 4.3 Suppose Exxaro Limited is considering a decrease of 10% per unit in the selling price of the product with the expectation that it would increase sales volume by 10%. Is this a good idea? Motivate your answer with relevant calculations.
Question Content Area Sales Mix and Break-Even Analysis Olmstead Company has fixed costs of $2,170,920. The unit selling price, variable cost per unit, and contribution margin per unit for the company's two products follow: Product Selling Price Variable Cost per Unit Contribution Margin per Unit QQ $700 $380 $320 ZZ 940 760 180 The sales mix for Products QQ and ZZ is 35% and 65%, respectively. Determine the break-even point in units of QQ and ZZ. If required, round your answers to the nearest whole number. a. Product QQ fill in the blank 1 unitsb. Product ZZ fill in the blank 2 units
Problem 10. Bulac Corporation manufactures and sells two products – Bangus and Tupig. Current revenue, costs and sales data on the two products appear below. Bangus P400 Tupig P600 Selling price per unit Variable cost per unit Number of units sold monthly 240 120 200 units 300 units Fixed costs and expenses are P704,000 per month. Required: a. Average contribution margin ratio. b. Composite breakeven point in units and in pesos. c. Allocation of composite breakeven point in units. d. Assuming the company increases its fixed costs and expenses by P140,800, how many units of Bangus and Tupig should be sold at breakeven point? e. Refer to the original data, assuming the sales mix between Bangus and Tupig is 500 units for Bangus and 300 units for Tupig, what is the new combined breakeven point in units and in pesos? f. Consider the original data, except that Pangasinan Company based its sales mix in units. Determine the following: i. Average UCM. ii. Composite BEP in units and in pesos.
EXERCISE A-2 Absorption Costing Approach to Setting a Selling Price LOZ) Martin Company is considering the introduction of a new product. To determine a selling price, the company has gathered the following information: Number of units to be produced and sold each year. Unit product cost.... Projected annual selling and administrative expenses Estimated investment required by the company Desired return on investment (ROI) 14,000 $25 $50,000 $750,000 12% Required: The company uses the absorption costing approach to cost-plus pricing. 1. Compute the markup required to achieve the desired ROI. 2. Compute the selling price per unit.
Problem 12-21 (Algo) Prepare a contribution margin format income statement; answer what-if questions LO 12-7, 12-8, 12-9 Shown here is an income statement in the traditional format for a firm with a sales volume of 7,500 units. Cost formulas also are shown: Revenues Cost of goods sold ($5,900 + $2.25/unit) Gross profit Operating expenses: Selling ($1,200 + $0.10/unit) Administrative ($3,500 + $0.20/unit) Operating income $34,400 22,775 $ 11,625 1,950 5,000 $ 4,675 Required: a. Prepare an income statement in the contribution margin format. b. Calculate the contribution margin per unit and the contribution margin ratio. c. Calculate the firm's operating income (or loss) if the volume changed from 7,500 units to 1. 11,250 units. 2. 3,750 units. d. Refer to your answer to part a for total revenues of $34,400. Calculate the firm's operating income (or loss) if unit selling price and variable expenses per unit do not change and total revenues 1. Increase by $14,500. 2. Decrease by $3,000.
Question 8 -/1 S View Policies ons Current Attempt in Progress Support Morales Corporation produces microwave ovens. The following per unit cost information is available: direct materials $34, direct labor $29, variable manufacturing overhead $15, fixed manufacturing overhead $42, variable selling and administrative expenses $17, and fixed selling and administrative expenses $26. Its desired ROI per unit is $29. Compute the markup percentage using absorption- cost pricing. (Round answer to 2 decimal places, eg al 10.50%.) Markup percentage 8:44 PM ) 11/18/2019 hp ho l ins 12 home end delete pg up prt sc 44 ++ backspace lock 7 P Dome CO 96
Question Content Area Steven Company has fixed costs of $271,352. The unit selling price, variable cost per unit, and contribution margin per unit for the company's two products are provided below. Product Selling Price per Unit Variable Cost per Unit Contribution Margin per Unit X $832 $312 $520 Y 624 334 290 The sales mix for Products X and Y is 60% and 40%, respectively. Determine the break-even point in units of X and Y. Round answers to the nearest whole number.
Question Content Area If fixed costs are $284,000, the unit selling price is $35, and the unit variable costs are $22, the break-even sales (units) if fixed costs are reduced by $39,400 is a. 15,052 units b. 18,815 units c. 28,223 units d. 22,578 units

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