Rylan Corporation received an offer from an exporter for 25,000 units of product at $16 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available: Domestic unit sales price $22 Unit manufacturing costs: Variable 11 Fixed 6 What is the amount of the income or loss from acceptance of the offer? a. $125,000 loss b. $125,000 income c. $25,000 loss d. $25,000 income

Rylan Corporation received an offer from an exporter for 25,000 units of product at $16 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available: Domestic unit sales price $22 Unit manufacturing costs: Variable 11 Fixed 6 What is the amount of the income or loss from acceptance of the offer? a. $125,000 loss b. $125,000 income c. $25,000 loss d. $25,000 income

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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PROBLEM 8. The Color Company manufactures and sells two products. The selling prices and variable costs of the products are as follows: Blujets Blupens P20 Selling prices Variable costs P40 8 24 The sales for 2021 were in the ratio of 3 Blujets to 1 Blupen. Sales volume for 2021 was P1 million. Fixed costs for 2020 amounted to P390,000. Requirements: 4. If the sales mix was to change to 2 units of blujets to 1 unit of Blupen, would this have any effect on the breakeven sales? If so, what would be the new breakeven sales? 5. Assuming that the sales volume would remain at P1 million, what net income would be generated using the sales mix in number (4) above? 6. What sales revenue would be required if the firm wishes to generate a net income of P328,900 if the original mix of 3:1 prevailed?
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QUESTION 25 A product called Wallaby has revenue of $1,250,000, variable costs of goods sold of $850,000, variable selling expenses of $275,000, and fixed costs of $225,000, creating an operating loss of $(100,000). Using differential analysis, the Company will determine whether product Wallaby should be continued or discontinued, assuming fixed costs are unaffected by the decision. What amount for the variable cost of goods sold should be used in analyzing the alternative to discontinue product Wallaby? $0 O $425,000 This is not a choice. $850,000
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Question 5 ABC Ltd sells a product that has a price of GH¢8.00 per unit, variable manufacturing cost of GH 4.00 per unit. ABC Company has a fixed manufacturing cost of GH¢150,000 and fixed general, selling and administrative expenses of GH¢50,000. You are required to answer the following questions as the management accountant of ABC Ltd. a. How many units does ABC Company have to sell to breakeven? b. How many units does ABC Company have to sell to earn an operating income of GH$200,000? c. d. What sales revenue must ABC Company achieve to breakeven? e. What sales revenue must ABC Company achieve to earn an operating income of GH$200,000? Suppose ABC expects to sell 300,000 units, what is the margin of safety? How do you explain your result?
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