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Blaster Corporation manufactures hiking boots. For the coming year, the company has budgeted the following costs for the production and sale of 30,000 pairs of boots. Direct materials Direct labor Manufacturing overhead (fixed and variable) Selling and administrative expenses Totals Assume that the company decides to sell the boots at a unit price of $121 per pair. b-1. Compute the total fixed costs budgeted for the year. b-2. Compute the variable cost per unit. a. Sales price per unit b- Total fixed costs PLOND364 Required: a. Compute the sales price per unit that would result in a budgeted operating income of $900,000, assuming that the company produces and sells 30,000 pairs. (Hint: First compute the budgeted sales revenue needed to produce this operating income.) 1. b- b-3. Compute the contribution margin per pair of boots. b-4. Compute the number of pairs that must be produced and sold annually to break even at a sales price of $121 per pair. b- Budgeted Costs $ 630,000 300,000 720,000 600,000 $2,250,000 b- Variable cost per unit Contribution margin Number of pairs required to break even Budgeted Costs per Pair $21 10 24 per pair of boots 20 $ 75 Percentage of Costs Considered Variable 100% 100 25 20

Blaster Corporation manufactures hiking boots. For the coming year, the company has budgeted the following costs for the production and sale of 30,000 pairs of boots. Direct materials Direct labor Manufacturing overhead (fixed and variable) Selling and administrative expenses Totals Assume that the company decides to sell the boots at a unit price of $121 per pair. b-1. Compute the total fixed costs budgeted for the year. b-2. Compute the variable cost per unit. a. Sales price per unit b- Total fixed costs PLOND364 Required: a. Compute the sales price per unit that would result in a budgeted operating income of $900,000, assuming that the company produces and sells 30,000 pairs. (Hint: First compute the budgeted sales revenue needed to produce this operating income.) 1. b- b-3. Compute the contribution margin per pair of boots. b-4. Compute the number of pairs that must be produced and sold annually to break even at a sales price of $121 per pair. b- Budgeted Costs $ 630,000 300,000 720,000 600,000 $2,250,000 b- Variable cost per unit Contribution margin Number of pairs required to break even Budgeted Costs per Pair $21 10 24 per pair of boots 20 $ 75 Percentage of Costs Considered Variable 100% 100 25 20

Managerial Accounting: The Cornerstone of Business Decision-Making
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 26BEB: Variable Cost Ratio, Contribution Margin Ratio Chillmax Company plans to sell 3,500 pairs of shoes...
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Blaster Corporation manufactures hiking boots. For the coming year, the company has budgeted the following costs for the production and sale of 30,000 pairs of boots. Direct materials. Direct labor Manufacturing overhead (fixed and variable) Selling and administrative expenses Totals Assume that the company decides to sell the boots at a unit price of $121 per pair. b-1. Compute the total fixed costs budgeted for the year. b-2. Compute the variable cost per unit. a. Sales price per unit b- Total fixed costs 1 Required: a. Compute the sales price per unit that would result in a budgeted operating income of $900,000, assuming that the company produces and sells 30,000 pairs. (Hint: First compute the budgeted sales revenue needed to produce this operating income.) ܩ ܗܩܩ 3. Budgeted Costs 630,000 $ 300,000 720,000 600,000 $ 2,250,000 b-3. Compute the contribution margin per pair of boots. b-4. Compute the number of pairs that must be produced and sold annually to break even at a sales price of $121 per pair. 4. Variable cost per unit Contribution margin Number of pairs required to break even Budgeted Costs per Pair $21 10 24 20 $ 75 per pair of boots Percentage of Costs Considered Variable 100% 100 25 20
Transcribed Image Text:Blaster Corporation manufactures hiking boots. For the coming year, the company has budgeted the following costs for the production and sale of 30,000 pairs of boots. Direct materials. Direct labor Manufacturing overhead (fixed and variable) Selling and administrative expenses Totals Assume that the company decides to sell the boots at a unit price of $121 per pair. b-1. Compute the total fixed costs budgeted for the year. b-2. Compute the variable cost per unit. a. Sales price per unit b- Total fixed costs 1 Required: a. Compute the sales price per unit that would result in a budgeted operating income of $900,000, assuming that the company produces and sells 30,000 pairs. (Hint: First compute the budgeted sales revenue needed to produce this operating income.) ܩ ܗܩܩ 3. Budgeted Costs 630,000 $ 300,000 720,000 600,000 $ 2,250,000 b-3. Compute the contribution margin per pair of boots. b-4. Compute the number of pairs that must be produced and sold annually to break even at a sales price of $121 per pair. 4. Variable cost per unit Contribution margin Number of pairs required to break even Budgeted Costs per Pair $21 10 24 20 $ 75 per pair of boots Percentage of Costs Considered Variable 100% 100 25 20
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