1. Cisco Co. sells two products, the deluxe model and the standard. The deluxe sells for $40/unit.The standard sells for $20/unit. Sales are projected to be 1,000 units for the deluxe and 3,000units for the standard. The deluxe model uses 6 oz. of direct material, the standard model uses4 oz. of direct material. The material costs $.50/oz. The deluxe model takes 1/2 hour of laborto produce, the standard model takes 1/6 hour of labor to produce. The wage rate is$12.00/hour. Total overhead is $32,000, of which $24,000 is fixed. Total selling andadministration costs are $30,000, of which $14,000 is fixed. Prepare a Traditional IncomeStatement and a Contribution Margin Income Statement.Traditional Income StatementContribution Margin Income Statement2.a. How many units of the Deluxe must be sold to break even?2.b. How many units of the Standard must be sold to break even?-2.c. What is the Contribution Margin Ratio for the Deluxe model?-2.d. What is the Contribution Margin Ratio for the Standard model?2.e. What sales revenue is required for the Deluxe to achieve $2,000 profit for that model?2.f. What sales revenue is required for the Standard to achieve $2,000 profit for that model?-

Traditional Income Statement:A traditional income statement is a way to see how a company is doing…

Answered: 1. Cisco Co. sells two products, the…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 11EB: Power Corp. makes 2 products: blades for table saws and blades for handsaws. Each product passes...

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Power Corp. makes 2 products: blades for table saws and blades for handsaws. Each product passes through the sharpening machine area, which is the chief constraint during production. Handsaw blades take 15 minutes on the sharpening machine and have a contribution margin per blade of $15. Table saw blades take 20 minutes on the sharpening machine and have a contribution margin per blade of $35. If it is assumed that Power Corp. has 5,000 hours available on the sharpening machine to service a minimum demand for each product of 4,000 units, how much will profits increase if 200 more hours of machine time can be obtained?
Power Corp. makes 2 products: blades for table saws and blades for handsaws. Each product passes through the sharpening machine area, which is the chief constraint during production. Handsaw blades take 15 minutes on the sharpening machine and have a contribution margin per blade of $15. Table saw blades take 20 minutes on the sharpening machine and have a contribution margin per blade of $35. If it is assumed that Power Corp. has 5,000 hours available on the sharpening machine to service a minimum demand for each product of 4,000 units, how many of each product should be made?
Polaris Inc. manufactures two types of metal stampings for the automobile industry: door handles and trim kits. Fixed cost equals 146,000. Each door handle sells for 12 and has variable cost of 9; each trim kit sells for 8 and has variable cost of 5. Required: 1. What are the contribution margin per unit and the contribution margin ratio for door handles and for trim kits? 2. If Polaris sells 20,000 door handles and 40,000 trim kits, what is the operating income? 3. How many door handles and how many trim kits must be sold for Polaris to break even? 4. CONCEPTUAL CONNECTION Assume that Polaris has the opportunity to rearrange its plant to produce only trim kits. If this is done, fixed costs will decrease by 35,000, and 70,000 trim kits can be produced and sold. Is this a good idea? Explain.
3. Batman Products Inc. manufactures two items, masks and capes. Each item passes down two assembly lines. Masks take one hour on line I and 3 hours on line II. They sell for $24 each. Capes take 1 hour on line I and. 1 hour on line II. They sell for $4.00 each. Line I is available for 6 hours daily and line II is available for 12 hours daily. What is the maximum revenue from a day's production and how should they achieve it?
1. Cigco Co. sells two products, the deluxe model and the standard. The deluxe sells for $40/unit. The standard sells for $20/unit. Sales are projected to be 1,000 units for the deluxe and 3,000 units for the standard. The deluxe model uses 6 oz. of direct material, the standard model uses 4 oz. of direct material. The material costs $.50/oz. The deluxe model takes 1/2 hour of labor to produce, the standard model takes 1/6 hour of labor to produce. The wage rate is $12.00/hour. Total overhead is $32,000, of which $24,000 is fixed. Total selling and administration costs are $30,000, of which $14,000 is fixed. Prepare a Traditional Income Statement and a Contribution Margin Income Statement.
Tel Systems manufactures 2 products TLA and BIT. TLA selling price is $20/unit and variable costs are $13/unit. BIT selling price is $22/unit and variable costs are $10/unit. TLA requires 2 machine hours and BIT 4 machine hours. Demand for TLA is 2,000 units and for BIT is 1,600 units. Tel Systems works 5,000 hours. What is the optimal sales mix? O a. 2,000 TLA and 250 BIT O b. 2,000 TLA and 1,250 BIT O c. 0 TLA and 1,250 BIT O d. 2,000 TLA and O BIT O e. not enough data to answer O f. 1,000 TLA and 1,000 BIT O g. 2,000 TLA and 1,600 BIT
1. SportsHaven’s garden department produces bags of mulch. Fixed cost is $17,300. Each bag sells for $3.21 with a unit cost of $1.48. How many bags of mulch must be sold to breakeven?
A company produces two products, Gamma and Omega. Gamma sells for $10 per unit and Omega sells for $12.50 per unit. Variable costs are $7 per unit of Gamma and $8 per unit of Omega. The company has a capacity of 5,000 machine hours per month. Gamma uses 1 machine hour per unit and Omega uses 3 machine hours per unit.
Vallie Enterprise sells a product that cost $200 per unit and has a monthly demand of 500 units. The annual holding cost per unit is calculated as 2% of the unit purchase price. It costs thebusiness $30 to place a single order.The maximum number of units sold for any one week is 150 and minimum sales 80 units. The vendor takes anywhere from 2 to 4 weeks to deliver the merchandise after the order is placed. TheEOQ model is appropriate.i) What is the cost minimizing solution for this product each year?ii)Determine the re-order level, minimum inventory level and maximum inventory level for the product.
Summer company manufactures beach chairs. $ 4.00 of direct materials are needed for each chair. Labor is $ 15 an hour. The company manufactures 3 chairs per hour. Indirect costs are $ 9.00 per hour. Commissions to sellers are $ 2.00 per unit sold. The cost of a chair will be:
Santora Company manufactures two products—toaster ovens and bread machines. The following data are available: Toaster Ovens Bread Machines Sales price $70 $170 Variable costs $50 $70 Santora can manufacture six toaster ovens per machine hour and four bread machines per machine hour. Santora's production capacity is 1600 machine hours per month, and it can sell as many units of either type as it can produce. Which product and how many units should the company produce in a month to maximize profits? (Round machine hour per unit to two decimal places and your final answer to the nearest whole dollar.)
Argyle sells steel beams to building contractors in two sizes: regular and heavy. Argyle sells 4 regular beams for every one heavy beam. Cost data are as follows: Regular Heavy Price per unit $20.00 $16.00 Variable cost per unit Argyle's fixed costs are $2,880 per month. How much is the breakeven point for total sales revenues? $28.00 $20.00 A. $12,960 B. $12,880 OC. $9,600 OD. $13,240 C...

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