Change in Contribution MarginHead Pops Inc. manufactures two models of solar-powered, noise-canceling headphones: Sun Sound and Ear Bling models. The company is operating at less than full capacity.Market research indicates that 29,400 additional Sun Sound and 32,300 additional Ear Bling headphones could be sold. The operating income by unit of product is as follows:Sales priceVariable cost of goods soldManufacturing marginVariable selling and administrative expensesContribution marginFixed manufacturing costsOperating incomeHead Pops Inc.AnalysisLine Item DescriptionUnit volume increasex Contribution margin per unitIncrease in profitabilitySun SoundEar BlingHeadphones Headphones$29.80$46.50(16.70)(26.00)$13.10$20.50(6.00)$7.10(2.70)$4.40Prepare an analysis indicating the increase or decrease in total profitability if 29,400 additional Sun Sound and 32,300 additional Ear Bling headphones are produced and sold,assuming that there is sufficient capacity for the additional production. Round your per unit answers to two decimal places.000Sun Sound Ear BlingHeadphones Headphones(9.30)$11.20(4.20)$7.00

The analysis of additional income to be earned can be calculated by calculating additional…

Answered: Change in Contribution Margin Head Pops…

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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Change in Sales Mix and Contribution Margin Head Pops Inc. manufactures two models of solar-powered, noise-canceling headphones: Sun Sound and Ear Bling models. The company is operating at less than full capacity. Market research indicates that 32,100 additional Sun Sound and 35,600 additional Ear Bling headphones could be sold. The operating income by unit of product is as follows: Sales price Variable cost of goods sold Manufacturing margin Variable selling and administrative expenses Contribution margin Fixed manufacturing costs Operating income Sun Sound Ear Bling Headphones Headphones $30.80 $48.00 (17.20) (26.90) $13.60 $21.10 (6.20) (9.60) $7.40 $11.50 (2.80) (4.30) $4.60 $7.20 Prepare an analysis indicating the increase or decrease in total profitability if 32,100 additional Sun Sound and 35,600 additional Ear Bling headphones are produced and sold, assuming that there is sufficient capacity for the additional production. Round your per unit answers to two decimal place. Head…
Change in Contribution Margin Head Pops Inc. manufactures two models of solar-powered, noise-canceling headphones: Sun Sound and Ear Bling models. The company is operating at less than full capacity. Market research indicates that 30,600 additional Sun Sound and 34,000 additional Ear Bling headphones could be sold. The operating income by unit of product is as follows: Sun Sound Ear Bling Headphones Headphones Sales price $31.60 $49.30 Variable cost of goods sold (17.70) (27.60) Manufacturing margin $13.90 $21.70 Variable selling and administrative expenses (6.30) (9.90) Contribution margin $7.60 $11.80 Fixed manufacturing costs (2.80) (4.40) Operating income $4.80 $7.40 Prepare an analysis indicating the increase or decrease in total profitability if 30,600 additional Sun Sound and 34,000 additional Ear Bling headphones are produced and sold, assuming that there is sufficient capacity for the additional production. Round your per unit answers to two decimal places. Head Pops Inc.…
Change in Sales Mix and Contribution Margin Head Pops Inc. manufactures two models of solar-powered, noise-canceling headphones: Sun Sound and Ear Bling models. The company is operating at less than full capacity. Market research indicates that 33,600 additional Sun Sound and 36,600 additional Ear Bling headphones could be sold. The income from operations by unit of product is as follows: Sun SoundHeadphones Ear BlingHeadphones Sales price $34.10 $53.20 Variable cost of goods sold 19.10 29.80 Manufacturing margin $15.00 $23.40 Variable selling and administrative expenses 6.80 10.60 Contribution margin $8.20 $12.80 Fixed manufacturing costs 3.10 4.80 Income from operations $5.10 $8.00 Prepare an analysis indicating the increase or decrease in total profitability if 33,600 additional Sun Sound and 36,600 additional Ear Bling headphones are produced and sold, assuming that there is sufficient capacity for the additional production. Round…
Change in Sales Mix and Contribution Margin Head Pops Inc. manufactures two models of solar-powered, noise-canceling headphones: Sun Sound and Ear Bling models. The company is operating at less than full capacity. Market research indicates that 25,000 additional Sun Sound and 27,500 additional Ear Bling headphones could be sold. The operating income by unit of product is as follows: Sun Sound Ear Bling Headphones Headphones Sales price $28.00 $43.70 Variable cost of goods sold (15.70) (24.50) Manufacturing margin $12.30 $19.20 Variable selling and administrative expenses (5.60) (8.70) Contribution margin $6.70 $10.50 Fixed manufacturing costs (2.50) (3.90) Operating income $4.20 $6.60
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1 Lazy Days Inc. (LDI), sells hammocks. Revenue and cost information is given below: Sales Price 3. TL 30 Unit Variable Cost 20 Annual Fixed Operating Expenses 47,500 Required: a) Determine the sales volume in units and TL amount that would be required to attain a TL 12,500 profit. Verify your answer by preparing an income statement using the contribution margin format. b) LDI is considering the implementation of a quality improvement program. The program will require a TL 2.50 increase in the variable cost per unit. To inform its customers of the quality improvements, the company plans to spend an additional TL 5,000 for advertising. Assuming that the improvement program will increase sales to a level that is 1,500 units above the amount computed in requirement a, should LDI proceed with plans to improve product quality? Support your answer by preparing a budgeted income statement. c) Determine the new break-even point volume of units and sales in TL as well as the margin of safety…
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Product Cost Method of Product Costing Voice Com, Inc. uses the product cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 5,390 cell phones are as follows: Variable costs per unit: Direct materials Direct labor Factory overhead Selling and administrative expenses Total variable cost per unit Voice Com desires a profit equal to a 15% rate of return on invested assets of $600,200. a. Determine the amount of desired profit from the production and sale of 5,390 cell phones. $90 38 27 19 Markup Selling price $174 Fixed costs: Factory overhead Selling and administrative expenses b. Determine the product cost per unit for the production of 5,390 of cell phones. Round your answer to the nearest whole dollar. per unit c. Determine the product cost markup percentage for cell phones. Round your answer to two decimal places. % d. Determine the selling price of cell phones. Round your answers to the nearest whole dollar. Total Cost per unit per…
Scarce resource; discontinued product lines; negative contribution marginThe officers of Bardwell Company are reviewing the profitability of the company’s four products and the potential effects of several proposals for varying the product mix. The following is an excerpt from the income statement and other data. Total Product P Product Q Product R Product S Sales $187,800 $30,000 $54,000 $37,800 $66,000 Cost of goods sold (132,822) (14,250) (21,168) (41,904) (55,500) Gross profit $54,978 $15,750 $32,832 $(4,104) $10,500 Operating expenses (36,012) (5,970) (8,904) (8,478) (12,660) Income before taxes 18,966 $9,780 $23,928 $(12,582) $(2,160) Units sold 3,000 3,600 5,400 6,000 Sales price per unit $10.00 $15.00 $7.00 $11.00 Variable cost of goods sold 2.50 3.00 6.50 6.00 Variable operating expenses 1.17 1.25 1.00 1.20 Each of the following proposals is to be considered independently of the other proposals. Consider only the product changes stated in…
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Bates Company plans to add a new Item to its line of consumer product offerings. Two possible products are under consideration. Each unit of Product A costs $26 to produce and has a contribution margin of $13, while each unit of Product B costs $42 and has a contribution margin of $14. What is the differential revenue for this decision? Multiple Choice O O $29 $1 $17 $16
nformation concerning a product produced by Ender Company appears here: Sales price per unit $ 159 Variable cost per unit $ 78 Total annual fixed manufacturing and operating costs $ 510,300 Required Determine the following: Contribution margin per unit. Number of units that Ender must sell to break even. Sales level in units that Ender must reach to earn a profit of $234,900. Determine the margin of safety in units, sales dollars, and as a percentage.

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