Required 1 Required 2 Required 3 Required 4Assuming that direct labor-hours is the company's constraining resource, what is the highest total contribution margin thatthe company can earn if it makes optimal use of its constrained resource? (Do not round intermediate calculations. Roundyour final answer to a whole dollar amount.)Highest total contribution marginRequired 5 The Walton Toy Company manufactures a line of dolls and a sewing kit. Demand for the company's products is increasing, andmanagement requests assistance from you in determining an economical sales and production mix for the coming year. The companyhas provided the following data:Demand Next year Selling PriceProductDebbieper Unit$28.50$ 6.50Trish(units)56,00048,00041,00032,000331,000SarahMike$ 40.50$ 16.00$8.60Sewing kitThe following additional information is available:DirectMaterials$ 4.90$ 1.70$7.34$ 2.60$ 3.80DirectLabor$4.40$ 1.28$ 6.80$5.20$ 0.88a. The company's plant has a capacity of 120,140 direct labor-hours per year on a single-shift basis. The company's present employeesand equipment can produce all five products.b. The direct labor rate of $8 per hour is expected to remain unchanged during the coming year.c. Fixed manufacturing costs total $580,000 per year. Variable overhead costs are $5 per direct labor-hour.d. All of the company's nonmanufacturing costs are fixed.e. The company's finished goods inventory is negligible and can be ignored.

The contribution margin is calculated as difference between sales and variable costs. The variable…

Required 1 Required 2 Required 3 Required 4 Assuming that direct labor-hours is the company's constraining resource, what is the highest total contribution margin that the company can earn if it makes optimal use of its constrained resource? (Do not round intermediate calculations. Round your final answer to a whole dollar amount.) Highest total contribution margin Required 5

Required 1 Required 2 Required 3 Required 4 Assuming that direct labor-hours is the company's constraining resource, what is the highest total contribution margin that the company can earn if it makes optimal use of its constrained resource? (Do not round intermediate calculations. Round your final answer to a whole dollar amount.) Highest total contribution margin Required 5

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter7: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 29BEB: Sales Needed to Earn Target Income Chillmax Company plans to sell 3,500 pairs of shoes at 60 each in...

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The Walton Toy Company manufactures a line of dolls and a sewing kit. Demand for the company's products is increasing, and management requests assistance from you in determining an economical sales and production mix for the coming year. The company has provided the following data: Product Demand Next year (units) Debbie Trish Sarah Mike Sewing kit Selling Price per Unit $ 15.50 $ 6.00 51,000 43,000 $ 25.00 36,000 40,000 $ 11.00 326,000 $ 8.10 The following additional information is available: Direct Materials $ 4.40 $ 1.20 $6.59 $ 2.10 $ 3.30 Direct Labor $ 2.70 $ 1.20 $ 4.50 $ 3.30 $0.90 a. The company's plant has a capacity of 118,450 direct labor-hours per year on a single-shift basis. The company's present employees and equipment can produce all five products. b. The direct labor rate of $6 per hour is expected to remain unchanged during the coming year. c. Fixed manufacturing costs total $530,000 per year. Variable overhead costs are $3 per direct labor-hour. d. All of the…
The Walton Toy Company manufactures a line of dolls and a sewing kit. Demand for the company's products is increasing, and management requests assistance from you in determining an economical sales and production mix for the coming year. The company has provided the following data: Product Debbie Trish Sarah Mike Sewing kit Demand Next year (units) 63,000 55,000 48,000 Selling Price per Unit $ 21.00 $7.50 $36.50 $ 16.00 $ 9.30 48,000 338,000 The following additional information is available: Direct Materials $ 5.60 $ 2.40 $ 8.39 $ 3.30 $4.50 Direct Labor $ 4.20 $1.44 $ 7.80 $ 5.40 $ 0.84 a. The company's plant has a capacity of 94,310 direct labor-hours per year on a single-shift basis. The company's present employees and equipment can produce all five products. b. The direct labor rate of $12 per hour is expected to remain unchanged during the coming year. c. Fixed manufacturing costs total $650,000 per year. Variable overhead costs are $4 per direct labor-hour. d. All of the…
The Walton Toy Company manufactures a line of dolls and a sewing kit. Demand for the company's products is increasing, and management requests assistance from you in determining an economical sales and production mix for the coming year. The company has provided the following data: Demand Next Selling Price year (units) per Unit $16.70 $ 7.50 $26.60 50,000 42,000 35,000 40,000 $ 14.00 325,000 $ 9.60 The following additional information is available: Product Debbie Trish Sarah Mike Sewing kit a. The company's plant has a capacity of 130,000 direct labor-hours per year on a single-shift basis. The company's present employees and equipment can produce all five products. b. The direct labor rate of $16 per hour is expected to remain unchanged during the coming year. c. Fixed manufacturing costs total $520,000 per year. Variable overhead costs are $2 per direct labor-hour. d. All of the company's nonmanufacturing costs are fixed. e. The company's finished goods inventory is negligible and…
An industry is going to launch a new product in the market in the year 2018. The data pertaining to the costs and the estimated sales is provided as follows 1. Fixed cost for the year 2018-2019 is 20000$. 2. The variable cost per unit is 12$. 3. The estimated sales are 800000$. 4. If each unit is sold at 30$. Find out 1. Break-even point. 2. The profit at a turn-over of 25000 units. 3. Margin of safety in terms of units and sales. 4. If a profit target is 1200000$, compute the turn over required. 5. Also construct the break-even chart and show the details on it.
Biblio Files Company is making plans for its next fiscal year, and decides to sell two new types of bookshelves, Basic and Deluxe. The company has compiled the following estimates for the new product offerings. Type of Bookshelf Sales Price per Unit Variable Cost per Unit Basic $5.00 $1.75 Deluxe 9.00 8.10 The company is interested in determining how many of each type of bookshelf would have to be sold in order to break even. If we think of the Basic and Deluxe products as components of one overall enterprise product called “Combined,” the unit contribution margin for the Combined product would be $2.31. Fixed costs for the upcoming year are estimated at $346,962. Recall that the totals of all the sales mix percents must be 100%. Determine the amounts to complete the following table. Type of Bookshelf Percent of Sales Mix Break-Even Sales in Units Break-Even Sales in Dollars Basic Deluxe
Biblio Files Company is making plans for its next fiscal year, and decides to sell two new types of bookshelves, Basic and Deluxe. The company has compiled the following estimates for the new product offerings. Type of Bookshelf Sales Price per Unit Variable Cost per Unit Basic $5.00 $1.75 Deluxe 9.00 8.10 The company is interested in determining how many of each type of bookshelf would have to be sold in order to break even. If we think of the Basic and Deluxe products as components of one overall enterprise product called “Combined,” the unit contribution margin for the Combined product would be $2.31. Fixed costs for the upcoming year are estimated at $346,962. Recall that the totals of all the sales mix percents must be 100%. Determine the amounts to complete the following table. Type of Bookshelf Percent of Sales Mix Break-Even Sales in Units Break-Even Sales in Dollars Basic Deluxe Cover-to-Cover Company…
Answer the following short problems: 1. Wergas, Inc. has determined the following for a given year: Economic order quantity Total cost to place purchase orders for the year Cost to place one purchase order Cost to carry one unit for 1 year What is Wergas' estimated annual usage in units? 5,000 units P 10,000 P 50 P4 2. Alilio Company is planning to build a new plant in Batangas City. The plant is expected to provide additional sales as follows: First Year Second Year Third Year P 2.0 million P2.5 million P 3.0 million (maximum capacity) The financial manager of Alilio estimates that for every peso of sales, P0.25 must be invested in current as sets. If all discounts are taken and bills are paid on time, accounts payable average P 0.04 per peso of sales. Other current liabilities, such as wages payable, typically average P0.05 per peso of sales. Required: a. Estimate the working capital investments required for the new plant in the l", 2nd & 3rd year of operations. b. How do these…
Woodland Wearables produces two models of a smart watch, the Basic and the Flash. The watches have the following characteristics: Selling price per watch Variable cost per watch Expected sales (watches) per year Basic $ 260 Flash $ 455 $ 180 18,000 $ 215 6,000 The total fixed costs per year for the company are $1,449,600. Required: a. What is the anticipated level of profits for the expected sales volumes? b. Assuming that the product mix is the same at the break-even point, compute the break-even point in units. c. If the product sales mix were to change to nine Basic watches for each Flash watch, what would be the new break-even volume for Woodland Wearables? Complete this question by entering your answers in the tabs below. Required A Required B Required C What is the anticipated level of profits for the expected sales volumes? Anticipated profit
Woodland Wearables produces two models of a smart watch, the Basic and the Flash. The watches have the following characteristics: Basic Flash Selling price per watch $ 450 $ 550 Variable cost per watch $ 370 $ 310 Expected sales (watches) per year 75,000 25,000 The total fixed costs per year for the company are $1,632,000. Required: What is the anticipated level of profits for the expected sales volumes? Assuming that the product mix is the same at the break-even point, compute the break-even point in units. If the product sales mix were to change to nine Basic watches for each Flash watch, what would be the new break-even volume for Woodland Wearables?
Fisk Corporation is trying to improve its inventory control system and has installed an online computer at its retail stores. Fisk anticipates sales of 60,500 units per year, an ordering cost of $12 per order, and carrying costs of $1.20 per unit.a. What is the economic ordering quantity?___________Units b. How many orders will be placed during the year? __________Orders c. What will the average inventory be? ____________Units d. What is the total cost of ordering and carrying inventory? $____________
Derby Phones is considering the introduction of a new model of headphones with the following price and cost characteristics. Sales price $ 18 per unit Variable costs 7 per unit Fixed costs 27,000 per month Assume that the projected number of units sold for the month is 7,000. Consider requirements (b), (c), and (d) independently of each other. Required: a. What will the operating profit be? b. What is the impact on operating profit if the sales price decreases by 10 percent? Increases by 20 percent? c. What is the impact on operating profit if variable costs per unit decrease by 10 percent? Increase by 20 percent? d. Suppose that fixed costs for the year are 10 percent lower than projected, and variable costs per unit are 10 percent higher than projected. What impact will these cost changes have on operating profit for the year? Will profit go up? Down? By how much?
Basu Company produces two types of sleds for playing in the snow: basic sled and aerosled. The projected income for the coming year, segmented by product line, follows: The selling prices are 30 for the basic sled and 60 for the aerosled. (Round break-even packages and break-even units to the nearest whole unit.) Required: 1. Compute the number of units of each product that must be sold for Basu to break even. 2. Assume that the marketing manager changes the sales mix of the two products so that the ratio is five basic sleds to three aerosleds. Repeat Requirement 1. 3. CONCEPTUAL CONNECTION Refer to the original data. Suppose that Basu can increase the sales of aerosleds with increased advertising. The extra advertising would cost an additional 195,000, and some of the potential purchasers of basic sleds would switch to aerosleds. In total, sales of aerosleds would increase by 12,000 units, and sales of basic sleds would decrease by 5,000 units. Would Basu be better off with this strategy?