FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Related questions
Concept explainers
Question
Transcribed Image Text:Lattimer Company had the following results of operations for the past year:
Contribution margin
(15,60 0 units )
income
statement
Per Unit
Annual Total
Sales
$ 12.00
$ 187,200
Variable costs
Direct materials
1.50
23,400
62,400
15,600
Direct labor
4.00
Overhead
1.00
Contribution margin
Fixed costs
5.50
85,800
Fixed overhead
1.00
15,600
Fixed selling and administrative expenses
1.40
21,840
$ 3.10
$ 48,360
Income
foreign company offers to buy 5,200 units at $7.50 per unit. In addition to variable costs, selling these units WNOU
roduction capacity is 25,600 units. If Lattimer accepts this additional business, the special order will yield a:
Multiple Choice
$3,900 profit.
$2,100 loss.
Transcribed Image Text:Per
Unit
Annual
Total
$ 12.00
$ 187,200
1.50
23,400
4.00
62,400
1.00
15,600
5.50
85,800
1.00
15,600
1.40
21,840
$ 3.10
$ 48,36O
variable costs, selling these units would add a $0.25 selling expense for export fees. Lattimer's annual
Ss, the special order will yield a:
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 with 1 images
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
- Benoit Company produces three products—A, B, and C. Data concerning the three products follow (per unit): Product B $ 62.00 Selling price Variable expenses: Direct materials Other variable expenses Total variable expenses Contribution margin Contribution margin ratio A $80.00 Required 1 Required 2 24.00 24.00 48.00 $ 32.00 Required 3 40% 18.00 25.40 43.40 $ 18.60 30% с $81.00 The company estimates it can sell 800 units of each product per month. The same raw material is used in each product. The material costs $3 per pound with a maximum of 5,000 pounds available each month. Required: 1. Calculate the contribution margin per pound of the constraining resource for each product. 2. Which orders would you advise the company to accept first, those for A, B, or C? Which orders second? Third? 3. What is the maximum contribution margin the company can earn per month if it makes optimal use of its 5,000 pounds of materials? Contribution margin per pound of the constraining resource 9.00 43.65…arrow_forward1. Providence Corporation produces a single product and has the following cost structure: Number of units produced each year Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative expense Fixed costs: Fixed manufacturing overhead Fixed selling and administrative expense lanolevil subivibr The unit product cost under variable costing is: 7,000 mos i h $78 $89 $6 $3 $532,000 $574,000arrow_forward8. Given the following data, calculate product cost per unit under variable costing. Direct labor $7 per unit Direct materials $1 per unit Overhead Total variable overhead $20,000 Total fixed overhead $90,000 Expected units to be produced 40,000 units A. $8 per unit B. $8.50 per unit C. $10.25 per unit D. $10.75 per unit E. $12 per unitarrow_forward
- kk. Subject:- Accountingarrow_forwardA corporation's cost data is: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Sales commissions Variable administrative expense Fixed selling and administrative expense What is the amount of product costs, if 4,000 units are produced? Multiple Choice O O O O $57,200 $8,800 $44,400 $53,200 Cost per Cost per Unit Period $ 6.00 $ 3.35 $ 1.75 $ 1.00 $ 0.40 $ 8,800 $ 4,000arrow_forwardFarrow Company reports the following annual results. Contribution Margin Income Statement Sales (200,000 units) Variable costs Direct materials Direct labor Overhead Contribution margin Fixed costs Fixed overhead Fixed general and administrative Income Per Unit $ 15.00 Annual Total $ 3,000,000 2.00 400,000 4.00 800,000 2.50 500,000 6.50 1,300,000 2.00 1.50 400,000 300,000 $ 3.00 $ 600,000 The company receives a special offer for 20,000 units at $13 per unit. The additional sales would not affect its normal sales. Variable costs per unit would be the same for the special offer as they are for the normal units. The special offer would require incremental fixed overhead of $80,000 and incremental fixed general and administrative costs of $86,000. (a) Compute the income or loss for the special offer. (b) Should the company accept or reject the special offer? Complete this question by entering your answers in the tabs below. Required A Required B Compute the income or loss for the special…arrow_forward
- Total Amount Units Sales Variable Costs: 31,250 Per Unit $ 445,313 $ 14.25 Direct Materials $ 125,000 4.00 = Direct Labor $ 28,000 0.90 = Variable Manufacturing Overhead $ 66,250 2.12 = Sales Commissions $ 15,625 0.50 = Shipping Variable Billing Total Variable Costs $ 3,125 0.10 $ 313 0.01 $ 238,313 7.63 Contribution Margin $ 207,000 6.62 Fixed Costs: Fixed Manufacturing Overhead Advertising Sales and Admin. Salaries Fixed Billing Total Fixed Costs Net Operating Income (Loss) 40,000 16,800 87,300 10,000 154,100 $ 52,900 F. Using the budgeted contribution margin income statement in part E. above, calculate the following: a. Breakeven in units: b. Operating Leverage Multiplier: Given a sales volume increase of 8%, operating income will increase by: c. Percent: d. Dollars: #N/A #N/A #N/A #N/Aarrow_forwardSubject: accountingarrow_forwardBenoit Company produces three products-A, B, and C. Data concerning the three products follow (per unit): Product B $ 62.00 Selling price Variable expenses: Direct materials Other variable expenses Total variable expenses Contribution margin Contribution margin ratio A $ 80.00 24.00 24.00 48.00 $ 32.00 Required 1 Required 2 40% Required 3 18.00 25.40 43.40 $18.60 30% с $81.00 The company estimates that it can sell 800 units of each product per month. The same raw material is used in each product. The material costs $3 per pound with a maximum of 5,000 pounds available each month. 9.00 43.65 52.65 $28.35 Required: 1. Calculate the contribution margin per pound of the constraining resource for each product. 2. Which orders would you advise the company to accept first, those for A, B, or C? Which orders second? Third? 3. What is the maximum contribution margin that the company can earn per month if it makes optimal use of its 5,000 pounds of materials? 35% Complete this question by…arrow_forward
- A piece of equipment is available for purchase for $ 16000 has an estimated useful life of 5 years, and has an estimated salvage value of $ 4000. Determine the depreciation and the book value for each of the 5 years using the straight-line method and the double declining-balance method? (Compare)arrow_forwardA tile manufacturer has supplied the following data: Boxes of tiles produced and sold Sales revenue Variable manufacturing expense Fixed manufacturing expense Variable selling and administrative expense Fixed selling and administrative expense Net operating income a. b. $ $ What is the company's unit contribution margin? $0.86 per unit $2.35 per unit $4.10 per unit $1.75 per unit C. d. 520,000 2,132,000 650,000 $ 464,000 $ 260,000 $ 312,000 $ 446,000arrow_forwardGiven the following data, calculate product cost per unit under absorption costing. Direct labor Direct materials Variable overhead Fixed overhead Units produced per year Multiple Choice $28.00 per unit $28.60 per unit $30.00 per unit $30.90 per unit $ 17.00 per unit $ 11.00 per unit $ 0.90 per unit $ 100,000 50,000 unitsarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
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:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial 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