Knitline Inc. produces high-end sweaters and jackets in a single factory. The following information was provided for the coming year.   Sweaters Jackets Sales $210,000 $450,000 Variable cost of goods sold 145,000 196,000 Direct fixed overhead 25,000 47,000 A sales commission of 5% of sales is paid for each of the two product lines. Direct fixed selling and administrative expense was estimated to be $20,000 for the sweater line and $50,000 for the jacket line. Common fixed overhead for the factory was estimated to be $45,000. Common selling and administrative expense was estimated to be $15,000. Required: Prepare a segmented income statement for Knitline for the coming year, using variable costing. Enter all amounts as positive numbers. Knitline Inc. Segmented Income Statement For the Coming Year   Sweaters Jackets Total     $ $ $   Less variable expenses:                             Contribution margin $ $ $   Less direct fixed expenses:                             Segment margin $ $ $   Less common fixed expenses:                                   $   2. CONCEPTUAL CONNECTION Suppose that next year, all revenues and costs are expected to remain the same except for direct fixed overhead expense, which will go up by $10,000 for one of the product lines due to costs related to new equipment. Does it matter which line (sweaters or jackets) requires the new equipment? Why?

Pam-Tees Company plans to sell 11,000 T-shirts at $15 each in the coming year. Product costs include:   Direct materials per T-shirt   $4.75   Direct labour per T—shirt   $2.25   Variable overhead per T- shirt   $0.50 Total fixed factory overhead $32,000     Variable selling expense is the redemption of a coupon, which averages $0.70 per T-shirt; fixed selling and administrative expenses total $17,000. Required: Calculate the: 1. Variable product cost per unit 2. Contribution margin ratio (rounded to four significant digits) 3.  Total fixed expense for the year 4.  Break Even point in quantity (Q) 5.  Margin of Safety in Quantity (Q)

GEM Limited has a single product Flicks. The company normally produces and sells 80,000 units of Flicks each year at a price of $240 per unit. The company’s unit costs at this level of activity are as follow: Direct material.         $57.00Direct labour             60.00 Variable manufacturing overhead.   16.80 Fixed manufacturing overhead         30.00Variable selling and administrative costs                10.20 Fixed selling and administrative costs              27.00 Total unit cost                 $201.00   GEM has sufficient capacity to produce 100 000 units of Flicks a year without any increase in fixed manufacturing overhead. Required:  GEM has an opportunity to sell 10 000 units to an overseas customer. Import duties and other special costs associated with this order would total $42 000. The only selling costs that would be associated with the order would be a shipping cost of $9.00 per unit. What would be the minimum acceptable unit price for GEM to consider this…

Econ Company produces widgets. Each widget sells for $120, and the company sells approximately 50,000 widgets each year. Unit cost data for the year follows: Direct Material, $38 Direct Labor, $20 Other Cost:            Variable           Fixed Manufacturing          $12                  $8 Distribution                 8                     6   a. $70   b. $45   c. $75   d. $89

Comer Company produces and sells strings of colorful indoor/outdoor lights for holiday display to retailers for $12.41 per string. The variable costs per string are as follows: Direct materials $1.87 Direct labor 1.70 Variable factory overhead 0.57 Variable selling expense 0.42 Fixed manufacturing cost totals $551,855 per year. Administrative cost (all fixed) totals $419,190. Comer expects to sell 247,000 strings of light next year. Required: 1.  Calculate the break-even point in units.fill in the blank 1 units 2.  Calculate the margin of safety in units.fill in the blank 2 units 3.  Calculate the margin of safety in dollars.$fill in the blank 3

Jay-Zee Company makes an in-car navigation system. Next year, Jay-Zee plans to sell 19,000 units at a price of $340 each. Product costs include: Direct materials $71.00 Direct labor $41.00 Variable overhead $10.00 Total fixed factory overhead $584,800 Variable selling expense is a commission of 4 percent of price; fixed selling and administrative expenses total $98,600.

Jay-Zee Company makes an in-car navigation system. Next year, Jay-Zee plans to sell 16,000units at a price of $320 each. Product costs include: Direct materials $68Direct labor $40Variable overhead $12Total fixed factory overhead $500,000 Variable selling expense is a commission of 5 percent of price; fixed selling and administrativeexpenses total $116,400.Required:1. Calculate the sales commission per unit sold. Calculate the contribution margin per unit.2. How many units must Jay-Zee Company sell to break even? Prepare an income statementfor the calculated number of units.3. Calculate the number of units Jay-Zee Company must sell to achieve target operatingincome (profit) of $333,408.4. What if the Jay-Zee Company wanted to achieve a target operating income of $322,000?Would the number of units needed increase or decrease compared to your answer inRequirement 3? Compute the number of units needed for the new target operating income.

GEM Limited has a single product Flicks. The company normally produces and sells 80,000units of Flicks each year at a price of $240 per unit. The company’s unit costs at this level ofactivity are as follow:Direct material $57.00Direct labor 60.00Variable manufacturing overhead 16.80Fixed manufacturing overhead 30.00Variable selling and administrative costs 10.20Fixed selling and administrative costs 27.00             Total unit cost                       $201.00GEM has sufficient capacity to produce 100 000 units of Flicks a year without any increase infixed manufacturing overhead.Required:(a) GEM has an opportunity to sell 10 000 units to an overseas customer. Import duties andother special costs associated with this order would total $42 000. The only selling coststhat would be associated with the order would be a shipping cost of $9.00 per unit.What would be the minimum acceptable unit price for GEM to consider this order?(hint: GEM would not accept the order if it would reduce the…

Swisher, Incorporated reports the following annual cost data for its single product: Normal production level 30,000 units Direct materials $6.40 per unit Direct labor $3.93 per unit Variable overhead $5.80 per unit Fixed overhead $150,000 in total This product is normally sold for $48 per unit. If Swisher increases its production to 50,000 units, while sales remain at the current 30,000 unit level, by how much would the company's income increase or decrease under variable costing? $60,000 decrease. b. $90,000 decrease. c.There is no change in gross margin. d. $90,000 increase. e. $60,000 increase.