Managerial Accounting
3rd Edition
ISBN: 9780077826482
Author: Stacey M Whitecotton Associate Professor, Robert Libby, Fred Phillips Associate Professor
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Textbook Question
Chapter 6, Problem 5.1GAP
Analyzing Multiproduct CVP, Break-Even Point, Target Profit, margin of safety
Lindstrom Company products two fountain pen models. Information about its products following:
Lindstrom’s fixed costs total $78,500.
Determine Lindstrom’s weighted-average unit contribution margin and weighted-average contribution margin ratio.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Lindstrom Company produces two fountain pen models. Information about its products follows:
Product A
Product B
Sales revenue
Less: Variable costs
Contribution margin
Total units sold
Lindstrom's fixed costs total $86,500.
Required:
$ 76,600
41,400
$ 46,000
5,000
$ 123,400
52,800
$ 91,000
5,000
1. Determine Lindstrom's weighted-average unit contribution margin and weighted-average contribution margin ratio.
2. Calculate Lindstrom's break-even point in units and in sales revenue.
3. Calculate the number of units that Lindstrom must sell to earn a $150,000 profit.
4. Calculate Lindstrom's margin of safety (in units and sales dollars) and margin of safety as a percentage of sales based on the sales
data provided in the table above.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Required 3
Required 4
Calculate the number of units that Lindstrom must sell to earn a $150,000 profit.
Note: Do not round your intermediate calculations. Round your answer…
Lillibridge & Friends, Incorporated provides you with the following data for its single product:
Sales price per unit
Fixed costs (per quarter):
Selling, general, and administrative (SG&A)
Manufacturing overhead
Variable costs (per unit):
Direct labor
Direct materials
Manufacturing overhead
SG&A
Number of units produced per quarter
a. Prime cost per unit
b. Contribution margin per unit
c. Gross margin per unit
d. Conversion cost per unit
e. Variable cost per unit
Required:
Compute the amounts for each of the following assuming that the production levels are within the relevant range if the number of units
is 500,000 per quarter. Also calculate if the number of units increases to 600,000 per quarter.
Note: Do not round intermediate calculations. Round your answers to 2 decimal places.
f. Full absorption cost per unit
g. Variable production cost per unit
h. Full cost per unit
$ 140
1,500,000
4,500,000
$
17
20
18
14
500,000 units
500,000 units 600,000 units
37.00 $
$
37.00
55.00 $
55.00
Lillibridge & Friends, Incorporated provides you with the following data for its single product:
Sales price per unit
Fixed costs (per quarter):
Selling, general, and administrative (SG&A)
Manufacturing overhead
Variable costs (per unit):
Direct labor
Direct materials
Manufacturing overhead
SG&A
Number of units produced per quarter
a. Prime cost per unit
b. Contribution margin per unit
c. Gross margin per unit
d. Conversion cost per unit
e. Variable cost per unit
f. Full absorption cost per unit
g. Variable production cost per unit
h. Full cost per unit
Required:
Compute the amounts for each of the following assuming that the production levels are within the relevant range if the number of units
is 500,000 per quarter. Also calculate if the number of units increases to 600,000 per quarter.
Note: Do not round intermediate calculations. Round your answers to 2 decimal places.
$
$
$ 160
1,500,000
4,500,000
500,000 units 600,000 units
41.00 $
41.00
83.00
$
$
$
$
19
22
20
16
500,000 units…
Chapter 6 Solutions
Managerial Accounting
Ch. 6 - Identify and briefly describe the assumptions of...Ch. 6 - Why should managers create a CVT graph?Ch. 6 - When considering a CVP graph, how is the...Ch. 6 - Your supervisor has requested that you prepare a...Ch. 6 - Why is it important for a company to know its...Ch. 6 - Explain the difference between unit contribution...Ch. 6 - A Company’s Cost structure can have a high...Ch. 6 - Prob. 8QCh. 6 - Prob. 9QCh. 6 - Bert Company and Ernie Company are competitors in...
Ch. 6 - Prob. 11QCh. 6 - Explain margin of safety. Why is important for...Ch. 6 - Give an example of a company to which margin of...Ch. 6 - Explain how a decision to automate a manufacturing...Ch. 6 - Explain degree of operating leverage and how it...Ch. 6 - Prob. 16QCh. 6 - Why is sales mix important to multiproduct CVP...Ch. 6 - Prob. 18QCh. 6 - Prob. 19QCh. 6 - Prob. 20QCh. 6 - Prob. 21QCh. 6 - Prob. 22QCh. 6 - Which of the following is not an assumption of CVP...Ch. 6 - Prob. 2MCCh. 6 - Prob. 3MCCh. 6 - Prob. 4MCCh. 6 - Prob. 5MCCh. 6 - Prob. 6MCCh. 6 - Prob. 7MCCh. 6 - Prob. 8MCCh. 6 - Prob. 9MCCh. 6 - Prob. 10MCCh. 6 - Prob. 1MECh. 6 - Prob. 2MECh. 6 - Prob. 3MECh. 6 - Prob. 4MECh. 6 - Prob. 5MECh. 6 - Calculating Break-Even Point After Cost Structure...Ch. 6 - Prob. 7MECh. 6 - Prob. 8MECh. 6 - Prob. 9MECh. 6 - Prob. 10MECh. 6 - Prob. 11MECh. 6 - Prob. 12MECh. 6 - Prob. 13MECh. 6 - Prob. 14MECh. 6 - Prob. 15MECh. 6 - Analyzing Multiproduct CVP Refer to the...Ch. 6 - Prob. 17MECh. 6 - Prob. 18MECh. 6 - Prob. 19MECh. 6 - Prob. 2ECh. 6 - Determining Break-Even Point, target Profit....Ch. 6 - Analyzing Changes in Price, Cost Structure, Degree...Ch. 6 - Prob. 5ECh. 6 - Prob. 6ECh. 6 - Matching Terms to Definitions Match the...Ch. 6 - Analyzing Break-Even Point, Preparing CVP Graph,...Ch. 6 - Calculating Contribution Margin, Contribution...Ch. 6 - Prob. 10ECh. 6 - Calculating Target Profit, Margin of Safety,...Ch. 6 - Prob. 12ECh. 6 - Prob. 13ECh. 6 - Prob. 14ECh. 6 - Prob. 15ECh. 6 - Analyzing Multiproduct CVP Biscayne’s Rent-A-Ride...Ch. 6 - Prob. 17ECh. 6 - Prob. 18ECh. 6 - Prob. 19ECh. 6 - Prob. 20ECh. 6 - Prob. 21ECh. 6 - Prob. 22ECh. 6 - Prob. 1.1GAPCh. 6 - Prob. 1.2GAPCh. 6 - Prob. 1.3GAPCh. 6 - Prob. 1.4GAPCh. 6 - Prob. 2.1GAPCh. 6 - Prob. 2.2GAPCh. 6 - Prob. 2.3GAPCh. 6 - Prob. 2.4GAPCh. 6 - Prob. 3.1GAPCh. 6 - Prob. 3.2GAPCh. 6 - Prob. 3.3GAPCh. 6 - Prob. 3.4GAPCh. 6 - Prob. 3.5GAPCh. 6 - Calculating Contribution Margin, Contribution...Ch. 6 - Prob. 4.1GAPCh. 6 - Analyzing Break-Even Point, Target Profit, Degree...Ch. 6 - Prob. 4.3GAPCh. 6 - Prob. 4.4GAPCh. 6 - Prob. 4.5GAPCh. 6 - Prob. 4.6GAPCh. 6 - Prob. 4.7GAPCh. 6 - Prob. 4.8GAPCh. 6 - Analyzing Multiproduct CVP, Break-Even Point,...Ch. 6 - Prob. 5.2GAPCh. 6 - Prob. 5.3GAPCh. 6 - Prob. 5.4GAPCh. 6 - Prob. 6.1GAPCh. 6 - Prob. 6.2GAPCh. 6 - Prob. 6.3GAPCh. 6 - Prob. 6.4GAPCh. 6 - Prob. 6.5GAPCh. 6 - Prob. 6.6GAPCh. 6 - Prob. 7.1GAPCh. 6 - Prob. 7.2GAPCh. 6 - Prob. 7.3GAPCh. 6 - Prob. 1.1GBPCh. 6 - Prob. 1.2GBPCh. 6 - Prob. 1.3GBPCh. 6 - Prob. 1.4GBPCh. 6 - Prob. 2.1GBPCh. 6 - Prob. 2.2GBPCh. 6 - Prob. 2.3GBPCh. 6 - Prob. 2.4GBPCh. 6 - Prob. 3.1GBPCh. 6 - Prob. 3.2GBPCh. 6 - Prob. 3.3GBPCh. 6 - Prob. 3.4GBPCh. 6 - Prob. 3.5GBPCh. 6 - Prob. 3.6GBPCh. 6 - Prob. 4.1GBPCh. 6 - Prob. 4.2GBPCh. 6 - Prob. 4.3GBPCh. 6 - Prob. 4.4GBPCh. 6 - Prob. 4.5GBPCh. 6 - Prob. 4.6GBPCh. 6 - Prob. 4.7GBPCh. 6 - Prob. 4.8GBPCh. 6 - Prob. 5.1GBPCh. 6 - Prob. 5.2GBPCh. 6 - Prob. 5.3GBPCh. 6 - Prob. 5.4GBPCh. 6 - Prob. 6.1GBPCh. 6 - Prob. 6.2GBPCh. 6 - Prob. 6.3GBPCh. 6 - Prob. 6.4GBPCh. 6 - Prob. 6.5GBPCh. 6 - Prob. 6.6GBPCh. 6 - Prob. 7.1GBPCh. 6 - Prob. 7.2GBPCh. 6 - Prob. 7.3GBP
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
- Lillibridge & Friends, Incorporated provides you with the following data for its single product: Sales price per unit Fixed costs (per quarter): Selling, general, and administrative (SG&A) Manufacturing overhead Variable costs (per unit): Direct labor Direct materials Manufacturing overhead SG&A Number of units produced per quarter a. Prime cost per unit b. Contribution margin per unit c. Gross margin per unit d. Conversion cost per unit e. Variable cost per unit f. Full absorption cost per unit Required: Compute the amounts for each of the following assuming that the production levels are within the relevant range if the number of units is 500,000 per quarter. Also calculate if the number of units increases to 600,000 per quarter. Note: Round your answers to 2 decimal places. g. Variable production cost per unit h. Full cost per unit 500,000 units $ $ S $ 50 1,500,000 4,500,000 600,000 units $ 19.00 17.00 $ 13.00 $ 8 11 9 5 500,000 units 19.00 17.00 14.50arrow_forwardComplete the table below for contribution margin per unit, total contribution margin, and contribution margin ratio: E (Click the icon to view the table.) Compute the missing information, starting with scenario A, then for scenarios B and C. (Enter the contribution margin ratio to nearest percent, X%.) A Number of units 1,510 units Sale price per unit $ 1,600 Variable costs per unit 1, 120 Calculate: Contribution margin per unit Total contribution margin Contribution margin ratio Data Table A Number of units 1,510 units 14,390 units 2,450 units Sale price per unit 1,600 $ 4.400 5,000 Variable costs per unit 1,120 880 3,750 Calculate: Contribution margin per unit Total contribution margin Contribution margin ratio Print Done Enter any number in the edit fields and then click Check Answer. parts remaining Clear All Final Checkarrow_forwardLillibridge & Friends, Incorporated provides you with the following data for its single product: Sales price per unit Fixed costs (per quarter): Selling, general, and administrative (SG&A) Manufacturing overhead Variable costs (per unit): Direct labor Direct materials Manufacturing overhead SG&A Number of units produced per quarter a. Prime cost per unit b. Contribution margin per unit c. Gross margin per unit d. Conversion cost per unit e. Variable cost per unit f. Full absorption cost per unit g. Variable production cost per unit h. Full cost per unit 500,000 units $50 1,500,000 4,500,000 Required: Compute the amounts for each of the following assuming that the production levels are within the relevant range if the number of units is 500,000 per quarter. Also calculate if the number of units increases to 600,000 per quarter. Note: Round your answers to 2 decimal places. 8 600,000 units 11 9 5 500,000 unitsarrow_forward
- Complete the table below for contribution margin per unit, total contribution margin, and contribution margin ratio: LOADING... (Click the icon to view the table.) Compute the missing information, starting with scenario A, then for scenarios B and C. (Enter the contribution margin ratio to nearest percent, X%.) A Number of units 2,833 units Sale price per unit $200 Variable costs per unit 80 Calculate: Contribution margin per unit Total contribution margin Contribution margin ratio % Data Table A B C Number of units 2,833 units 3,100 units 5,600 units Sale price per unit $200 $3,000 $125 Variable costs per unit 80 1,500 100 Calculate: Contribution margin per unit Total contribution margin Contribution margin ratioarrow_forwardContribution margin by segment The following information is for LaPlanche Industries Inc.: Determine the contribution margin for (A) Product YY and (B) West Region.arrow_forwardManufacturing builds and sells switch harnesses for glove boxes. The sales price and variable cost for each follows: Their sales mix is reflected in the ratio 4:4:1. What is the overall unit contribution margin for JJ Manufacturing with their current product mix?arrow_forward
- Complete the table below for contribution margin per unit, total contribution margin, and contribution margin ratio: (Click the icon to view the table.) Compute the missing information, starting with scenario A, then for scenarios B and C. (Enter the contribution margin ratio to nearest percent, X%.) A B C 1,290 units 14,390 units 3,600 units 1,400 4,400 $ 1,250 700 880 625 Number of units Sale price per unit Variable costs per unit Calculate: 700 Contribution margin per unit Total contribution margin 903,000 Contribution margin ratio 50% 3520 50,652,800 80% %arrow_forwardProduct Profitability Analysis PowerTrain Sports Inc. manufactures and sells two styles of All Terrain Vehicles (ATVS), the Mountain Monster and Desert Dragon, from a single manufacturing facility. The manufacturing facility operates at 100% of capacity. The following per-unit information is available for the two products: Mountain Monster Desert Dragon Sales price $6,000 $4,000 Variable cost of goods sold 3,780 2,680 Manufacturing margin $2,220 $1,320 Variable selling expenses 1,260 480 Contribution margin $960 $840 Fixed expenses 450 340 Income from operations $510 $500 In addition, the following sales unit volume information for the period is as follows: Mountain Monster Desert Dragon Sales unit volume 3,000 2,300 a. Prepare a contribution margin by product report. Calculate the contribution margin ratio for each product as a whole percent.arrow_forwardXYZ Company's product has a contribution margin per unit of $12 and a variable cost ratio of 90%. What is the selling price of the product? Select one: Oa. $120. Ob.$28.125. Oc.$37.5. O d. $60. Oe. $22.5. Next page learrow_forward
- Wimberley Ltd provides the following data regarding its four product lines: A B C D Product Selling price ($) 10 Variable costs per unit ($) Sales mix 35 55 91 3 16 29 65 60 20 15 5 Required Calculate, to two decimal places, the weighted average contribution margin per unit (WACMU).arrow_forwardUse a cost-volume graph to determine the type of cost behavior exhibited in Groups A, B, and C. In the graph, volume should range from 0 to 24,000 units (in 4,000 unit increments), and cost should range from $0 to $35,000 (in $5,000 increments). Volume Group A Group B Group C (applicable to each group) Costs Costs Costs 2,000 12,000 16,000 20,000 $2,600 $1,000 $2,400 12,600 6,000 2,400 16,600 8,000 2,400 20,600 10,000 2,400 1. Identify the cost behavior (fixed, mixed, or variable) in the three groups. Group Cost behavior A B C 2. What is the expected total cost for Group B if volume is 0? $ 3. What is the expected total cost for Group C if volume is 0? Checkarrow_forwardComputing absorption cost per unit and variable cost per unit Adamson, Inc. has the following cost data for Product X: Calculate the unit product cost using absorption costing and variable costing when production is 2,000 units, 2,500 units, and 5,000 units.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax CollegeFinancial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
How to Estimate Project Costs: A Method for Cost Estimation; Author: Online PM Courses - Mike Clayton;https://www.youtube.com/watch?v=YQ2Wi3Jh3X0;License: Standard Youtube License