Answer:
Alpha Technology
Outstanding Computer's consumption ratio for setup hours is:
b. 0.48
Explanation:
a) Data and Calculations:
Overhead activities and costs:
Setting up equipment $3,000
Machining $15,000
Excellent Outstanding
Laptops Computers
Direct Labor $25,000 $10,000
Direct Materials $20,000 $5,000
Expected Production in Units 3,000 3,000
Machine Hours 850 2,000
Setup Hours 80 75
Total setup hours = 155 hours
Outstanding Computer's consumption ratio for setup hours = 75/155 * 100
= 48%
. If it outsources the navigation system, fixed costs could be reduced by half, and the vacant facilities could be rented out to earn $2000 per month of rental income. What is the maximum contract cost that Fruit Boat Company should pay for outsourcing
Answer: $2,425
Explanation:
Fruit Boat should not pay more for the contract than they would if they were producing the good themselves.
= Variable cost + Avoidable fixed costs + Opportunity cost per month
Avoidable fixed cost = (39,000 / 2) / 10 boats = 19,500 / 10 = $1,950
Opportunity cost per month = 2,000 / 10 boats
= $200
Contract price = 275 + 1,950 + 200
= $2,425
Suppose Gulf Shipping Company has the following results related to cash flows for 2019:
Net Income of $7,800,000
Decrease in Accounts Payable of $300,000
Increase in Accounts Receivable of $800,000
Depreciation of $1,200,000
Increase in Inventory of $900,000
Other Adjustments from Operating Activities of $700,000
Assuming no other cash flow adjustments than those listed above, create a statement of cash flows with amounts in thousands.
What is the Net Cash Flow from Operating Activities?
Note: Financial results are provided in dollars but the income statement units are thousands of dollars.
Please specify your answer in the same units as the statement of cash flows (i.e., enter the number from your completed statement of cash flows).
Answer:
$7,700
Explanation:
Cash Flow from Operating Activities
Particulars Amount
Net Income $7,800
Add: Depreciation $1,200
Add: Other adjustments $700
Cash flow before working capital adjustments $9,700
Less: Decrease in Accounts payable ($300)
Increase in Accounts receivable ($800)
Increase in Inventory ($900)
Net Cash flow from Operating activities $7,700
As operations manager, you are concerned about being able to meet sales requirements in the coming months. You have just been given the following production report: JAN FEB MAR APR Units produced 2,250 1,750 2,750 2,950 Hours per machine 318 194 393 315 Number of machines 5 7 6 5 Find the average of the monthly productivity figures (units per machine hour).
Answer: 2.81 per hour
Explanation:
Average monthly productivity = (January productivity + February productivity + March productivity + April productivity) / 4
January productivity:
= Units produced / ( Hours per machine * Number of machines )
= 2,250 / ( 318 * 2 )
= 3.537
February productivity:
= 1,750/ ( 194 * 4 )
= 2.255
March productivity:
= 2,750 / ( 393 * 3 )
= 2.332
April productivity:
= 2,950/ ( 315 * 3)
= 3.121
Average monthly productivity = (3.537 + 2.255 + 2.332 + 3.121)/ 4
= 2.81 per hour
If farmer sam macdoanld can produce 200 pounds of cabbages and 0 pounds of patotes or 0 pound of cabbes and 100 pounds of potatoes and faces a linear produciton possiblies curve for his farm, the opportunity cost of production an additional pound of cabbage is:_____.
a. 1/2.
b. 2.
c. 100.
d. 200.
Duane Miller wants to know what price home he can afford. His annual gross income is $67,200. He has no other debt expenses and expects property taxes and insurance to cost $320 per month. He knows he can get a 8.50%, 15 year mortgage so his mortgage payment factor is 9.85. He expects to make a 25% down payment. What is Duane's affordable home purchase price?
a. $107,929.
b. $158,793.
c. $138,207.
d. $209,139.
e. $179,665.
MC Qu. 87 Riemer, Inc. has four... Riemer, Inc. has four departments. Information about these departments is listed below. Maintenance is a service department. If allocated maintenance cost is based on floor space occupied by each of the other departments, compute the amount of maintenance cost allocated to the Cutting Department. (Do not round your intermediate computations.) Maintenance Cutting Assembly Packaging Direct costs$18,000 $24,000 $64,000 $39,000 Sq. ft. of space 750 1,250 2,250 2,500 No. of employees 7 3 7 7
WHAT ARE THE BENEFITS OF PHYSICAL ERGONOMICS
Answer:
▫️Increased savings. • Fewer injuries. • More productive and sustainable employees. ...
▫️Fewer employees experiencing pain. • Implementing ergonomic improvements can reduce the risk factors that lead to discomfort.
▫️Increased productivity. • ...
▫️Increased morale. • ...
▫️Reduced absenteeism. •
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Explanation:
Hope it will help you
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Panther Co. had a quality-assurance warranty liability of $350,000 at the beginning of 2021 and $310,000 at the end of 2021. Warranty expense is based on 4% of sales, which were $50 million for the year. What amount of warranty costs were paid during 2021?
a. $0.
b. $1,960,000.
c. $2,000,000.
d. $2,040,000.
Answer:B
Explanation: :)
. If Canace Company, with a break-even point at $313,500 of sales, has actual sales of $570,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales? Round the percentage to the nearest whole number. 1. $fill in the blank 1 2. fill in the blank 2 % b. If the margin of safety for Canace Company was 25%, fixed costs were $1,419,375, and variable costs were 75% of sales, what was the amount of actual sales (dollars)? (Hint: Determine the break-even in sales dollars first.) $fill in the blank 3
Answer:
Canace Company
a-1) Margin of safety is:
= $256,500.
a-2) Margin of safety is:
= 55%.
b) The amount of actual sales is:
= $5,677,500.
Explanation:
a) Data and Calculations:
Break-even point sales = $313,500
Actual sales = $570,000
Margin of safety = $256,500 ($570,000 - $313,500)
Margin of safety as a percentage of sales = 55% ($313,500/$570,000 * 100)
2) Margin of safety = 25%
Fixed costs = $1,419,375
Break-even point in sales dollars = $1,419,375
Variable costs = 75% of sales
Contribution margin at break-even point = 25% (100% - 75%) = $1,419,375
Actual sales in dollars = $5,677,500 ($1,419,375/25%)
Third National Bank has reserves of $20,000 and checkable deposits of $100,000. The reserve ratio is 20 percent. Households deposit $5,000 in currency into the bank, and the bank adds that currency to its reserves. What amount of excess reserves does the bank now have
Answer:
$4000
Explanation:
Fractional banking is a banking system where a portion of customer's deposits is kept as reserves while remaining portion is lent out. The amount kept as reserves is determined by the required reserve ratio set by the Central bank.
Reserve ratio is the percentage of deposits that is required of commercial banks to keep as reserves
Total deposits = $100,000 + $5,000 = $105,000
Required reserves = 0.2 x 105000 = 21,000
total reserves = $20,000 + 5000 = 25,000
excess reserves = 25,000 - 21,000 = 4000
Ticketsales, Inc., receives $7,720,000 cash in advance ticket sales for a four-date tour of Bon Jovi. Record the advance ticket sales on October 31. Record the revenue earned for the first concert date of November 5, assuming it represents one-fourth of the advance ticket sales. Ticketsales, Inc. initially records prepaid and unearned items in balance sheet accounts.
View transaction list Journal entry worksheet Record the concert revenues earned. Note: Enter debits before credits. Debit Credit General Journal Date Nov 05
Answer:
When revenue has been received but the service has not been rendered, the revenue will not be recognized and will instead be treated as a liability called unearned revenue.
Date Account Title Debit Credit
Oct. 31 Cash $7,720,000
Unearned Ticket revenue $7,720,000
Date Account Title Debit Credit
Nov. 5 Unearned Ticket Revenue $1,930,000
Ticket Revenue $1,930,000
Working
Ticket revenue = 1/4 * 7,720,000
= $1,930,000
Casey transfers property with a tax basis of $3,800 and a fair market value of $6,800 to a corporation in exchange for stock with a fair market value of $5,250 and $720 in cash in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $830 on the property transferred. Casey also incurred selling expenses of $461. What is the amount realized by Casey in the exchange
Answer:
$5789
Explanation:
Calculation to determine the amount realized by Casey in the exchange
Fair market value of stock $5250
Add Cash in transaction $ 720
Add Liability which is going to the buyer $ 830
Less Selling expenses ($461)
Amount realized $5789
($5250+$720+$830-$461)
Therefore the amount realized by Casey in the exchange is $5789
A monopolist finds that a person’s demand for its product depends on the person’s age. The inverse demand function of someone of age y can be written p = A(y) − q, where A(y) is an increasing function of y. The product cannot be resold from one buyer to another and the monopolist knows the ages of its consumers. If the monopolist maximizes its profits:____.
Explanation:
A manufacturer of computer memory chips produces chips in lots of 1000. If nothing has gone wrong in the manufacturing process, at most 7 chips each lot would be defective, but if something does go wrong, there could be far more defective chips. If something goes wrong with a given lot, they discard the entire lot. It would be prohibitively expensive to test every chip in every lot, so they want to make the decision of whether or not to discard a given lot on the basis of the number of defective chips in a simple random sample. They decide they can afford to test 100 chips from each lot. You are hired as their statistician.
There is a tradeoff between the cost of eroneously discarding a good lot, and the cost of warranty claims if a bad lot is sold. The next few problems refer to this scenario.
Problem 8. (Continues previous problem.) A type I error occurs if (Q12)
Problem 9. (Continues previous problem.) A type II error occurs if (Q13)
Problem 10. (Continues previous problem.) Under the null hypothesis, the number of defective chips in a simple random sample of size 100 has a (Q14) distribution, with parameters (Q15)
Problem 11. (Continues previous problem.) To have a chance of at most 2% of discarding a lot given that the lot is good, the test should reject if the number of defectives in the sample of size 100 is greater than or equal to (Q16)
Problem 12. (Continues previous problem.) In that case, the chance of rejecting the lot if it really has 50 defective chips is (Q17)
Problem 13. (Continues previous problem.) In the long run, the fraction of lots with 7 defectives that will get discarded erroneously by this test is (Q18)
Problem 14. (Continues previous problem.) The smallest number of defectives in the lot for which this test has at least a 98% chance of correctly detecting that the lot was bad is (Q19)
(Continues previous problem.) Suppose that whether or not a lot is good is random, that the long-run fraction of lots that are good is 95%, and that whether each lot is good is independent of whether any other lot or lots are good. Assume that the sample drawn from a lot is independent of whether the lot is good or bad. To simplify the problem even more, assume that good lots contain exactly 7 defective chips, and that bad lots contain exactly 50 defective chips.
Problem 15. (Continues previous problem.) The number of lots the manufacturer has to produce to get one good lot that is not rejected by the test has a (Q20) distribution, with parameters (Q21)
Problem 16. (Continues previous problem.) The expected number of lots the manufacturer must make to get one good lot that is not rejected by the test is (Q22)
Problem 17. (Continues previous problem.) With this test and this mix of good and bad lots, among the lots that pass the test, the long-run fraction of lots that are actually bad is (Q23)
Fixed expenses are $17,000 per month. The company is currently selling 800 units per month. The marketing manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager has proposed a commission of $5 per unit. In exchange, the sales staff would accept a decrease in their salaries of $6,000 per month. (This is the company's savings for the entire sales staff.) The marketing manager predicts that introducing this sales incentive would increase monthly sales by 200 units. What should be the overall effect on the company's monthly net operating income of this change?
Answer:
There is a cost-saving of $1,000 per month as a result of the change. This cost-saving increases the monthly net operating income by $1,000.
Explanation:
a) Data and Calculations:
Fixed monthly expenses = $17,000
Current sales units per month = 800
Proposed sales commission per unit = $5
Decrease in salaries per month = $6,000
Increase in sales units per month = 200
Change
Before After Difference
Fixed monthly expenses $17,000 $11,000 $6,000
Variable cost per month 0 5,000 -5,000
Total cost per month $17,000 $16,000 $1,000
Sales units per month 800 1,000 200 units
b) The effect on the company's monthly net operating income is a reduction in the total cost per month by $1,000. There is also an increase in the units sold per month by 200 units. If the selling price is determined, the net operating income will also increase by the product of the contribution margin per unit and 200.
Papermill Plc was acquired by a private equity firm, whose investment horizon is 5 years and minimum IRR requirement is 20.0%. The private equity firm estimates the exit EBITDA and exit EV EBITDA multiple to be 1,200.0 and 11.0x, respectively. The EBITDA at entry is 1,100.0 and the amount of debt financing raised at entry is 7.0x EBITDA. The cash flow model built by the private equity firm estimates the debt to be 5.0x EBITDA at exit. Using the assumptions above, estimate the equity funding of the deal at entry.
Sales 1,000.0
Cost of goods sold 600.0
Selling, general and administration 100.0
Interest expense 50.0
Tax expense 75.0
The estimated equity funding of the deal at entry is $2,893.52
EV means Enterprise value
EBITDA means Earnings Before Interest, Taxes, Depreciation, and Amortization
Given that the private equity firm estimates that:
Exit EBITDA = 1,200
EV / EBITDA = 11.0x
To derive EV from the EV / EBITDA, then EV / EBITDA is multiplied by EBITDA.
EV = EV / EBITDA * EBITDA (i.e.)
EV = 11 * 1,200
EV = 13,200
Given that the private equity firm estimates the debt to be 5.0x EBITDA at exit.
Debt = 5.0 * EBITDA at exit
Debt = 5.0 * 1,200
Debt = 6,000
To derive the equity value at exit, the debt is subtracted from the EV
Equity value at exit = EV - Debt
Equity value at exit = 13,200 - 6,000
Equity value at exit = 7,200
The equity funding of the deal at entry will be derived using this formula "Equity value at exit / (1 + IRR)^n" where IRR is 20% and n is 5 years
Equity funding of the deal at entry = 7,200 / (1 + 20%)^5
Equity funding of the deal at entry = 7,200 / (1 + 0.20)^5
Equity funding of the deal at entry = 7,200 / (1.20)^5
Equity funding of the deal at entry = 7,200 / 2.48832
Equity funding of the deal at entry = 2893.518518518519
Equity funding of the deal at entry = $2,893.52 (approx).
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Collective case studies are known as multiple-case studies, cross-case studies, comparative case studies and contrasting case studies. What is a cross-case study?
Answer:
Explanation:
Cross case studies involves the use to several individual case studies in other to support a scientific study or research with the aim of reaching a reasonable and acceptable conclusion which can be generalized and adopted for use in similar cases. Researchers usually employ the use of cross case case study in the formulation of new knowledge by collating several case studies based on the research scenario, then rigorous relationships are examined by comparing and contrasting features of the existing cases.
Demand for a specific design of dinning sets has been fairly large in the past several years and Statewide Furnishings, Inc. usually orders new dinning sets 10 times a year. It is estimated that the ordering cost is $400 per order. The carrying cost is $50 per unit per year. Furthermore, State Wide Furnishings, Inc. has estimated that the stock out cost is $120 per unit per year. Based on forecast, the annual demand is 600 units. State Wide Furnishings, Inc. has 350 working days in a year and its lead time is 14 working days.
Assume shortage is allowed and the store manager is sure that shortages will not become lost sales, determine the annual ordering cost.
a. 592.82
b. 1472.01
c. 2051.28
d. 4116.11
e. None of the above
Answer:
e. None of the above
Explanation:
Annual demand, D = 600 units
Ordering cost, S = $400
Holding cost, H = $50
Economic order quantity without stock-out = SQRT(2*D*S/H)
Economic order quantity without stock-out = SQRT(2*600*400/50)
Economic order quantity without stock-out = 98
Total annual ordering cost = (D/Q)*S + (Q/2)*H
Total annual ordering cost = (600/98)*$400 + (98/2)*$50
Total annual ordering cost = $2,448.97 + $2,450
Total annual ordering cost = $4,898.97
It should not usually be clear whether we are describing independent or mutually exclusive projects in the following chapters because when we only describe one project then it can be assumed to be independent.
a. True
b. False
Answer:
false
Explanation:
A mutually exclusive project is a project that if one occurs then the other project cannot occur also at the same time. Mutually exclusive projects are independent projects also
The balance in retained earnings at December 31, 2020 was $1,440,000 and at December 31, 2021 was $1,164,000. Net income for 2021 was $1,000,000. A stock dividend was declared and distributed which increased common stock $500,000 and paid-in capital $220,000. A cash dividend was declared and paid.
The stock dividend should be reported on the statement of cash flows (indirect method) as: ____________
a. an outflow from investing activities of $720,000.
b. an outflow from financing activities of $720,000.
c. an outflow from financing activities of $500,000.
d. Stock dividends are not shown on a statement of cash flows.
Answer: d. Stock dividends are not shown on a statement of cash flows.
Explanation:
A stock stock dividend refers to the dividend payment to the shareholders of s company that is not made in cash but rather it's made in shares.
It should be noted that the stock dividend is not reported on the cash flow statement. The reason for this is because it's a non cash item and also doesn't allow cash outflow. Therefore, it won't be reported.
Therefore, the correct option is D.
Paid for wages Rs. 2000 and for commission Rs. 3000. Journal entry for this?
Answer:
Wages A/c Dr.
To cash A/c
(being wages paid)
Commission A/c Dr
To cash A/c
(being comission paid)
You report to Sofia Cardenas-Bratton, the Marketing Manager for Klamath, but she confesses that her experience with social media consists of an online course that she took on how businesses effectively use social media, so she is relying on you to help shape Klamath's social media strategy. You suggest that you'd like to start with regularly publishing a blog to reinforce Klamath's value to its customers. You point out it's important to publish posts on a regular basis in order to keep visitors engaged, and one study found that publishing blogs at least 11 times per month generated the most traffic on company websites. You and Sofia brainstorm about topics for the first week's blogs and come up with a list of three topics that you both feel will be of value to Klamath's customers: improving your credit score, the advantages of community banks vs. large banks, and buying a house. In which order are you going to tackle these blogs
The order in which I would tackle these blogs are: buying a house, improving your credit score, and the advantages of community banks.
Since the blogs are meant to benefit the customers of Klamath the most, the first issue to tackle is on the purchase of a house, which is always rated high by customers.
The purchase of a house will also help to improve the credit scores of customers because customers who own their houses attract higher credit scores than those without houses of their own.
Then, the issue of credit scores will be tackled in the next blog, followed by the advantages of community banks vs. large banks.
Thus, tackling this blog dealing on an issue that is very dear to customers will be the first before other issues are tackled.
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The following cost behavior patterns describe anticipated manufacturing costs for 2013: raw material, $8.10/unit; direct labor, $11.10/unit; and manufacturing overhead, $373,100 $9.10/unit. Required: If anticipated production for 2013 is 41,000 units, calculate the unit cost using variable costing and absorption costing. (Round your answers to 2 decimal places.)
Answer:
Variable costing $28.3
Absorption costing $37.4
Explanation:
Calculation to determine the unit cost using variable costing and absorption costing.
VARIABLE COSTING
Material $8.10/unit
Direct labor $11.10/unit;
Variable manufacturing overhead per unit $9.10/unit
Units cost $28.3
ABSORPTION COSTING
Material $8.10/unit
Direct labor $11.10/unit;
Variable manufacturing overhead per unit $9.10/unit.
Fixed manufacturing overhead per unit $9.10/unit.
($373,100 ÷ 41,000 units)
Units cost $37.4
Therefore the unit cost using variable costing and absorption costing are:
Variable costing $28.3
Absorption costing $37.4
In its closing financial statements for its first year in business, the Runs and Goses Company, had cash of $242, accounts receivable of $850, inventory of $820, net fixed assets of $3,408, accounts payable of $700, short-term notes payable of $740, long-term liabilities of $1,100, common stock of $1,160, retained earnings of $1,620, net sales of $2,768, cost of goods sold of $1,210, depreciation of $360, interest expense of $160, taxes of $312, addition to retained earnings of $508, and dividends paid of $218.
Calculate:
a. Return on equity = __________
b. Return on total assets = __________
c. Gross profit margin = __________
d. Net profit margin = __________
Answer:
return on equality
return on way
return on potos
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Return on Equity can be calculated as Return on Equity = Net Income / share holders equity. Return on Equity = 726 /2780. Thus, Return on Equity = 26.11%
What is Return on Equity?The ratio of a company's net income to the equity of its shareholders is known as return on equity (ROE). A company's profitability and the effectiveness of its revenue generation are measured by its return on equity (ROE). A corporation is better at turning its equity financing into profits the higher the ROE.
Although average ratios and those deemed "good" and "poor" might differ significantly from industry to industry, a return on equity ratio of 15% to 20% is typically regarded as good. The ratio would be regarded as low at 5%.
b)Return on Asset Ratio
Return on Asset Ratio = Net Income / Total Assets
Return on Asset Ratio = 726/ 5,320
Return on Asset Ratio = 13.65%
c)Gross Profit Margin
Gross Profit Margin = Gross Profit / Net Sales
Profit Margin = 1,558/ 2,768
Profit Margin =56.29%
d)Net Profit Margin
Net Profit Margin = Net Income / Net Sales
Profit Margin = 726/ 2,768
Net Profit Margin =26.23%
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The purpose of rough cut capacity planning is to: Select one: a. place a time fence around the MPS. b. determine a production schedule that offers a rough order of magnitude. c. cut excess capacity from the MPS. d. assess the feasibility of the MPS. e. govern the length of the execution cycle.
Answer:
The answer is "Option d".
Explanation:
To compute the estimated work on master capacity planning, the objective of basic resource allocation is utilized. It is then contrasted to a proven ability that enhances organizational MPS feasibility.
It verifies that you have enough ability at your disposal that satisfy the needs of your master's programs. It is a tool in long-term production scheduling for marketing and production to accomplish the ratio of the capacity required and accessible and to manage changes in the plan and/or looking.
For 2020, Ms. Deming earned wages totaling $225,000.
Required:
1. Calculate any 0.9 percent additional Medicare tax owed, assuming that Ms. Deming is single.
2. Calculate any 0.9 percent additional Medicare tax owed, assuming that Ms. Deming files a joint return with her husband who earned $100,000 of wages for 2019.
Answer:
Additional Medicare is charged on the wages that are higher than $200,000.
1. Medicare owed assuming Ms. Deming is single:
= (225,000 - 200,000) * 0.9%
= 25,000 * 0.9%
= $225
2. Medicare owed assuming Ms. Deming files a joint return with her husband.
When filed together, their wages would be considered jointly.
= ( (100,000 + 225,000) - 200,000) * 0.9%
= 125,000 * 0.9%
= $1,125
The total manufacturing cost variance is a.the difference between total actual costs and total standard costs for the units produced b.the difference between planned costs and standard costs for the units produced c.the flexible budget variance plus the time variance d.none of the above
Answer:
a.the difference between total actual costs and total standard costs for the units produced
Explanation:
The total manufacturing cost variance shows the difference between the total actual cost i.e. incurred and the standard cost incurred for the units that are produced or generated
In mathematically, it should be
Total manufacturing cost variance = standard cost - actual cost
hence, the first option is correct
* Distinguish between Accounts Receivable and
Account Payable.
Explanation:
Accounts receivable is money owed to a company by its debtors.
Account payable amounts due to vendors or suppliers for goods or services received that have not been yet paid for.
Answer:
Accounts receivable are the amounts owed to a company by its customers. it is an asset to the company
accounts payable are the amounts that a company owes to its suppliers.it is a liability to the company
Explanation:
An important sustainability issue that has received much more scrutiny in recent years is the: focus on adequate inventory levels. reduction in packaging waste by using alternate materials. effort to move warehouse storage closer to consumers. emphasis on materials handling and warehouse design. none of the above
Answer:
reduction in packaging waste by using alternate materials.
Explanation:
An important sustainability issue that has received much more scrutiny in recent years is the reduction in packaging waste through the use of alternative materials. You can see this happening through new laws that prohibit the use of plastic bags in supermarkets and plastic drinking straws, for example.
There are several companies that seek the use of biodegradable packaging, even if these are not provided for by law. Companies seek to adopt sustainable actions in their processes to demonstrate to their stakeholders that they follow ideal standards of environmental preservation and social awareness. This is a positive type of marketing for companies, as the population is more aware and wants to consume more from environmentally responsible companies.These companies then become more valued by their consumers and consequently more competitive and well positioned in the market
You have a portfolio that is 29 percent invested in Stock R, 12 percent invested in Stock S, with the remainder in Stock T. The expected return on these stocks is 9.8 percent, 11.2 percent, and 13.5 percent, respectively. What is the expected return on the portfolio
Answer: 12.15%
Explanation:
The expected return is a weighted average of the returns of the individual stocks and the percentage of the portfolio invested in them.
= (Weight of R * Return of R) + (Weight of S + Return of S) + (Weight of T + Return of T)
= (29% * 9.8%) + (12% * 11.2%) + ( (1 - 29% - 12%) * 13.5%)
= 12.15%
Assume that Corn Co. sold 7,600 units of Product A and 2,400 units of Product B during the past year. The unit contribution margins for Products A and B are $34 and $59, respectively. Corn has fixed costs of $378,000. The break-even point in units is a.9,450 units b.11,340 units c.7,560 units d.14,175 units
,Answer: a. 9,450 units
Explanation:
You need to find the weighted average contribution margin for both products.
Product A
Weighted average contribution margin = Contribution margin * Units sold / Total units sold
= 34 * 7,600 / (7,600 + 2,400)
= $25.84
Product B
= 59 * 2,400 / 10,000
= $14.16
Breakeven point in units = Fixed costs/ (Weighted average contribution margin of both A and B)
= 378,000 / (25.84 + 14.16)
= 9,450 units
