(a)
Concept introduction:
Contribution Margin: Contribution margin is the margin which is calculated by deducting variable cost from sales revenue.
To calculate:
Thecontribution margin earned on each backpack.
(b)
Concept introduction:
Contribution Margin: Contribution margin is the margin which is calculated by deducting variable cost from sales revenue.
To find out:
The contribution margin lost on each backpack donated to charity.
(c)
Concept introduction:
Contribution Margin: Contribution margin is the margin which is calculated by deducting variable cost from sales revenue.
To find out:
The contribution margin if one backpack is donated with each backpack.
(d)
Concept introduction:
Contribution Margin: Contribution margin is the margin which is calculated by deducting variable cost from sales revenue.
To find out:
The contribution margin if one backpack is donated with each backpack.
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Managerial Accounting
- Angie Silva has recently opened The Sandal Shop in Brisbane, Australia, a store that specializes in fashionable sandals. Angie has just received a degree in business and she is anxious to apply the principles she has learned to her business. In time, she hopes to open a chain of sandal shops. As a first step, she has prepared the following analysis for her new store: Sales price per pair of sandals $ 2.00 Variable expenses per pair of sandals 1.20 Contribution margin per pair of sandals $ 0.80 Fixed expenses per year: Building rental $ 9,000 Equipment depreciation 5,000 Selling 17,600 Administrative 18,000 Total fixed expenses $ 49,600 Required: 1. How many pairs of sandals must be sold each year to break even? What does this represent in total dollar sales? Break-even point in unit sales pairs Break-even point in dollar sales 3. Angie has decided that she must earn at…arrow_forwardAngie Silva has recently opened The Sandal Shop in Brisbane, Australia, a store that specializes in fashionable sandals. Angie has just received a degree in business and she is anxious to apply the principles she has learned to her business. In time, she hopes to open a chain of sandal shops. As a first step, she has prepared the following analysis for her new store: Sales price per pair of sandals $ 2.00 Variable expenses per pair of sandals 1.20 Contribution margin per pair of sandals $ 0.80 Fixed expenses per year: Building rental $ 9,000 Equipment depreciation 5,000 Selling 17,600 Administrative 18,000 Total fixed expenses $ 49,600arrow_forwardBE5.7 - Using Excel to Determine Profitability Given a Constrained Resource Student Work Area PROBLEM Required: Provide input into cells shaded in yellow in this template. Input the required mathematical formulas or functions with cell references to the Problem area or work area as indicated. Rachel wants to use her knitting skills to make a little extra money so she can enjoy a theatre weekend with her besties. She’s got the pattern down for a hat, scarf, and mittens, but she realizes that her available time is limited. She should be able to sell as many of any item as she can make, but she wants to make sure she’s making the best use of her time. Cost and time information are provided here. Calculate the contribution margin per unit of the scarce resource for each item. Hat Scarf Mittens Hat Scarf Mittens Contribution margin per Time in minutes 20 30…arrow_forward
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- Cost Behavior, High-Low Method, Pricing Decision Fonseca, Ruiz, and Dunn is a large, local accounting firm located in a southwestern city. Carlos Ruiz, one of the firm's founders, appreciates the success his firm has enjoyed and wants to give something back to his community. He believes that an inexpensive accounting services clinic could provide basic accounting services for small businesses located in the barrio. He wants to price the services at cost. Since the clinic is brand new, it has no experience to go on. Carlos decided to operate the clinic for 2 months before determining how much to charge per hour on an ongoing basis. As a temporary measure, the clinic adopted an hourly charge of $25, half the amount charged by Fonseca, Ruiz, and Dunn for professional services. The accounting services clinic opened on January 1. During January, the clinic had 120 hours of professional service. During February, the activity was 150 hours. Costs for these two levels of activity usage are as…arrow_forwardProblem: A T-shirt Business Shalon has a t-shirt business where she sells her own line of designer shirts. She is in it for the money. But in order to make money from selling her t-shirts, she needs to make sure her prices are at the right price point both in terms of making money and giving her customers a good deal. Shalon needs to take into consideration things like the cost of her time spent designing the shirts, the cost to manufacture the shirt, and the cost of keeping the store open. After all these costs are calculated, then she needs to figure out how much more she needs to add so she can make a good living from her t-shirt business. The total cost to make each shirt for Shalon is Php100. Of course, Shalon wants to make a profit from selling each shirt, so she sells the shirt for Php 300. (a.) . How much of a mark-on is this? (Explain your answer.) Shalon wants to make sure she is competitive with other t-shirt businesses in town, so she does some investigating of her own. She…arrow_forwardAnalyze Star Stream’s cost-volume-profit relationships Star Stream is a subscription-based video streaming service. Subscribers pay $120 per year for the service. Star Stream licenses and develops content for its subscribers. In addition, Star Stream leases servers to hold this content. These costs are not variable to the number of subscribers, but must be incurred regardless of the subscriber base. In addition, Star Stream compensates telecommunication companies for bandwidth so that Star Stream customers receive fast streaming services. These costs are variable to the number of subscribers. These and other costs are as follows: Enter your answers in whole dollars. Line Item Description Amount Server lease costs per year $ 100,000,000 Content costs per year 2,000,000,000 Fixed operating costs per year 900,000,000 Bandwidth costs per subscriber per year 15 Variable operating costs per subscriber per year 25 a. Determine the break-even number of subscribers.fill in the…arrow_forward
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