FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Concept explainers
Topic Video
Question
thumb_up100%
Laramie Company has variable cost ratio of 0.30. The fixed cost is $88,200 and 21,000 units are sold at break-even. What is the price? What is the variable cost per unit? The contribution margin per unit?
I'm not understanding how to get the answers for this. I followed an example but I am still not able to figure it out?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution
Trending nowThis is a popular solution!
Step by stepSolved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Please do not give solution in image format thankuarrow_forwardCurrent Attempt in Progress Wildhorse Delivery is a rapidly growing delivery service. Last year, 80% of its revenue came from the delivery of mailing "pouches" and small, standardized delivery boxes (which provides a 20% contribution margin). The other 20% of its revenue came from delivering non-standardized boxes (which provides a 70% contribution margin). With the rapid growth of Internet retail sales, Wildhorse believes that there are great opportunities for growth in the delivery of non-standardized boxes. The company has foxed costs of $13,868.100 Sales mix is determined based upon total sales dollars. (a) What is the company's break-even point in total sales dollars? At the break-even point, how much of the company's sales are provided by each type of service? (Use Weighted-Average Contribution Margin Ratio rounded to 2 decimal places eg.0.22 and round final answers to O decimal places, eg 2.510) Total break-even sales Sale of mail pouches and small boxes Sale of non-standard…arrow_forwardSweet Acacia Inc. makes unfinished bookcases that it sells for $58. Production costs are $38 variable and $9 fixed. Because it has unused capacity, Sweet Acacia is considering finishing the bookcases and selling them for $72. Variable finishing costs are expected to be $7 per unit with no increase in fixed costs. Prepare an analysis on a per-unit basis that shows whether Sweet Acacia should sell unfinished or finished bookcases. (If an amount reduces the net income then enter with a negative sign preceding the number, e.g. -15,000 or parenthesis, e.g. (15,000).) Sales per unit Variable cost per unit Fixed cost per unit Total per unit cost Net income per unit The bookcases 69 $ Sell ✓processed further. LA GA Process Further $ $ Net Income Increase (Decrease)arrow_forward
- Rahularrow_forwardEaton Tool Company has fixed costs of $435,600, sells its units for $94, and has variable costs of $50 per unit. a. Compute the break-even point. Break-even point b. Ms. Eaton comes up with a new plan to cut fixed costs to $340,000. However, more labor will now be required, which will increas variable costs per unit to $53. The sales price will remain at $94. What is the new break-even point? Note: Round your answer to the nearest whole number. New break-even point units Profitability will be less Profitability will be more units c. Under the new plan, what is likely to happen to profitability at very high volume levels (compared to the old plan)?arrow_forwardCan you please explain the statement with an example? Also, check whether my understanding of the example is correct. "If using the same unit fixed costs at different output levels, managers may reach erroneous conclusions. Total fixed costs should be used." My Understanding: For example, if the capacity is 1000 and currently we produce 1000 units and sell it for $20 per unit, variable cost $5 and the fixed cost $10 per unit (within the relevant range); and we have a special order to produce 1200 units for $8 per unit. Should we include additional the Total Fixed Cost of $10000, which is (10*1000) for the range (1001-2000) plus $10000 for the range (0-1000), which means, we will have a total fixed cost of $20000.arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education