Vaibh Assume a company purchases honeycombs from beekeepers for $2.00 a pound. The honey can be sold in raw form for $3.20 a pound or itcan be used to make honey drop candies. Each package of candies contains three-quarters of a pound of honey and can be sold for $4.40.In addition to the cost of the honey, making and selling each container of candies incurs additional variable costs of $1.10 per unit.The monthly fixed costs associated with making the candies include:Master candy-maker's salaryDepreciation of candy-making equipmentSalary of salesperson dedicated to this productTotal fixed costs$ 3,7964002,000$ 6,196The candy-making equipment does not wear out through use and it has no resale value. How many containers of candy does the companyneed to sell each month to exactly offset the avoidable fixed costs incurred to product and sell the candies? Total fixed costsThe candy-making equipment does not wear out through use and it has no resale value. How many containers of candy does the companyneed to sell each month to exactly offset the avoidable fixed costs incurred to product and sell the candles?Multiple Choice6,6796,4406,885$ 6,1966,350

In order to determine the candy to be sold, the avoidable fixed cost is required to be divided by…

Answered: Assume a company purchases honeycombs…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 6EB: Country Diner currently makes cookies for its boxed lunches. It uses 40,000 cookies annually in the...

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Country Diner currently makes cookies for its boxed lunches. It uses 40,000 cookies annually in the production of the boxed lunches. The costs to make the cookies are: A potential supplier has offered to sell Country Diner the cookies for $0.85 each. If the cookies are purchased, 10% of the fixed overhead could be avoided. If Jason accepts the offer, what will the effect on profit be?
Swiss Industries imports raw nuts from farmers at a cost of $8.40 per pound. Swiss can resell the nuts without any further processing for $9.00 a pound or it can use the nuts to make energy bars. Each box of energy bars contains eight-tenths (0.80) of a pound of nuts and can be sold for $13.20. Making and selling a box of energy bars requires additional variable costs of $3.30 per box. The traceable fixed costs associated with making energy bars includes the production line supervisor's salary of $5,805 per month, the product line sales manager's salary of $5,670 per month, and the depreciation expense on the specialized production equipment of $2,025 per month. The equipment has no resale value. Swiss is thinking about discontinuing production of energy bars. How many boxes of energy bars does Swiss need to sell each month to break-even on the production and sale of energy bars as opposed to merely reselling the raw nuts without any further processing? Round to the nearest whole…
A chocolatier produces and sells boxes of chocolates for which the fixed costs are $300 and the variablecost per box is $4. Each box of chocolate has a selling price of $20. Determine the number of boxes that must besold for the chocolatier to earn a profit of $4500
Company XYZ is a farming company. The company are famous for producing strawberries and blueberries. The variable cost of producing and selling one box of strawberries is $6, while the variable cost of producing and selling one box blueberries is $10. Each box of strawberries is selling for $20, while a box of blueberries sells for $26. The company produces and sells 5 boxes of strawberries for every 2 boxes of blueberries. Assuming a fixed cost of $204,000. How many boxes of blueberries need to be produced and sold to achieve breakeven? O a. 4,000 O b. 10,000 O c. 800 O d. None of the given answers O e. 2,000 REVIOUS PAGE NEXT PAGE Esc F1 F2 F3 F5 F6 F9 @ 2# $4 % & 1 2 3 4 7 Q W E IT Y F 1. 621 B Y NIM Alt 41
Juniper Enterprises sells handmade clocks. Its variable cost per clock is $6, and each clock sells for $24. The company’s fixed costs total $6,660.How many units must Juniper sell to earn a profit of at least $5,400?
Grace Co. can further process Product B to produce Product C. Product B is currently selling for $20 per pound and costs $15 per pound to produce. Product C would sell for $40 per pound and would require an additional cost of $10 per pound to produce. The differential revenue of producing and selling Product C is a. $30 per pound b. $40 per pound c. $25 per pound d. $20 per pound
Company XYZ is a farming company. The company are famous for producing strawberries and blueberries. The variable cost of producing and selling one box of strawberries is $6, while the variable cost of producing and selling one box blueberries is $10. Each box of strawberries is selling for $20, while a box of blueberries sells for $26. The company produces and sells 5 boxes of strawberries for every 2 boxes of blueberries. Assuming a fixed cost of $204,000. How many boxes of blueberries need to be produced and sold to achieve breakeven? O a. None of the given answers O b. 2,000 800 O d. 10,000 О е. 4,000
Grace Co. can further process Product B to produce Product C. Product B is currently selling for $24 per pound and costs $16 per pound to produce. Product C would sell for $39 per pound and would require an additional cost of $9 per pound to produce. What is the differential revenue of producing and selling Product C? a.$23 per pound b.$39 per pound c.$30 per pound d.$15 per pound
Rooney Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,100 containers follows. Unit-level materials Unit-level labor Unit-level overhead Product-level costs* $ 5,200 6,500 3,600 9,300 26,600 Allocated facility-level costs *One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Rooney for $2.70 each. Required a. Calculate the total relevant cost. Should Rooney continue to make the containers? b. Rooney could lease the space it currently uses in the manufacturing process. If leasing would produce $11,500 per month, calculate the total avoidable costs. Should Rooney continue to make the containers? a. Total relevant cost Should Rooney continue to make the containers? b. Total avoidable cost Should Rooney continue to make the containers?
Campbell Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,200 containers follows. Unit-level materials Unit-level labor Unit-level overhead Product-level costs* Allocated facility-level costs $ 6,900 6,400 4,100 9,600 26,600 *One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Campbell for $2.80 each. Required a. Calculate the total relevant cost. Should Campbell continue to make the containers? b. Campbell could lease the space it currently uses in the manufacturing process. If leasing would produce $12,800 per month, calculate the total avoidable costs. Should Campbell continue to make the containers? a. Total relevant cost Should Campbell continue to make the containers? b. Total avoidable cost Should Campbell continue to make the containers?
Seved Help Save & Exit Submit A company purchases fruit from farmers for $2.00 a pound. The fruit can be sold for $3.20 a pound or it can be used to make jelly. Each case of jelly contains three-quarters of a pound of fruit and can be soid for $4.40. In addition to the cost of the fruit, making and selling each case of jelly incurs additional variable costs of $1.10 per unit. The monthly fixed costs associated with making the jelly include: O Qu Jelly production salaries Depreciation of jelly-making equipment Salary of salesperson dedicated to selling jelly $4,000 400 2,000 Total fixed costs $6,400 Colla The jelly-making equipment does not wear out through use and it has no resale value. Assuming the company makes and sells 8,000 cases of Jelly. what is the financial advantage (disadvantage) of continuing to process fruit into jelly? Multiple Choice $(5,200) $(5,600)
Carmen Co. can further process Product J to produce Product D. Product J is currently selling for $20 per pound and costs $15.75 per pound to produce. Product D would sell for $38 per pound and would require an additional cost of $8.55 per pound to produce. What is the differential revenue of producing Product D?

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