Question

Your friend Maz runs a small shop on Etsy selling homemade knit scarves and beanies. Maz...

Your friend Maz runs a small shop on Etsy selling homemade knit scarves and beanies. Maz is trying to figure out what they needs to sell before Christmas to earn an operating income of $500. You volunteer to help them figure it out because of all you’ve learned in ACTG 211. Maz provides you with the following information about their business:

Scarf Beanie
Price per Unit $10 $9
Variable Cost per unit $6 $5
Sales history from last month 30 units 20 units
Fixed Cost $155

What is the weighted average cost per unit? Round answer to nearest penny (x.xx).

How many units does Maz need to sell to breakeven?  Round answer to a whole unit.

How many units does Maz need to sell to achieve their target operating income?  Round answer to a whole unit.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
Weighted Average cost per Unit =(6*60%+5*40%)=$5.60
BEP point = Fixed Expense/ WACMR
=155/4=39 Unit
Unit need to Sell =(Target Income + Fixed Expense)/ WACMR
=(155+500)/4= 164 Unit
Working Note :-Computation of Weighted Average Contribution Margin
Product Sales Mix Sales (a) Variable Cost
(b)		 Contribution (c=a-b) WACMR
(cxsales Mix)
Scarf 60% $10.00 $6.00 $4.00 $2.40
Beanie 40% $9.00 $5.00 $4.00 $1.60
Total $4.00
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Exercise 3-8 Sandhill Recreation Products sells the Amazing Foam Frisbee for $12. The variable cost per...
Exercise 3-8 Sandhill Recreation Products sells the Amazing Foam Frisbee for $12. The variable cost per unit is $3; fixed costs are $46,000 per month. What is the annual breakeven point in units? In sales dollars? (Use your answer of breakeven units to calculate the breakeven point in dollars. Round answers to 0 decimal places, e.g. 5,275.) The breakeven point _________ frisbees? The breakeven sales $_________? How many frisbees must Sandhill sell to earn $18,000 in operating income? (Round answer...
Splendid Glasses operates a kiosk at the local? mall, selling sunglasses for $ 20 each.Splendid Glasses...
Splendid Glasses operates a kiosk at the local? mall, selling sunglasses for $ 20 each.Splendid Glasses currently pays ?$1,920 a month to rent the space and pays two? full-time employees to each work 110 hours a month at $8 per hour. The store shares a manager with a neighboring kiosk and pays? 50% of the? manager's annual salary of $ 43,000 and benefits of $8,600. The wholesale cost of the sunglasses to the company is $ 9 a pair. Requirement...
Break-Even Units, Contribution Margin Ratio, Multiple-Product Breakeven, Margin of Safety, Degree of Operating Leverage Jellico Inc.'s...
Break-Even Units, Contribution Margin Ratio, Multiple-Product Breakeven, Margin of Safety, Degree of Operating Leverage Jellico Inc.'s projected operating income (based on sales of 450,000 units) for the coming year is as follows: Total Sales $ 11,700,000 Total variable cost 6,669,000 Contribution margin $ 5,031,000 Total fixed cost 2,871,024 Operating income $ 2,159,976 Required: 1(a). Compute variable cost per unit. Enter your answer to the nearest cent. $per unit 1(b). Compute contribution margin per unit. Enter your answer to the nearest...
Suppose you have decided to start a business producing and selling a product of your choice...
Suppose you have decided to start a business producing and selling a product of your choice from the following options: custom birthday cakes, lawn mowers or sports jackets. For your essay, answer the following questions related to your product: Briefly describe the product you would produce and sell. What market will you target this product for? At what price would you sell your product? Make a projection of your sales in units for the first year of operations. Make a...
Fashionables is a franchisee of The Limited, the well-known retailer of fashionable clothing. Prior to the...
Fashionables is a franchisee of The Limited, the well-known retailer of fashionable clothing. Prior to the winter season, The Limited offers Fashionables the choice of five different colors of a particular sweater design. The sweaters are knit overseas by hand, and because of the lead times involved, Fashionables will need to order its assortment in advance of the selling season. As per the contracting terms offered by The Limited, Fashionables also will not be able to cancel, modify, or reorder...
To be profitable, a firm has recover its costs. These costs include both fixed and variable...
To be profitable, a firm has recover its costs. These costs include both fixed and variable costs. One way that a firm evaluates at what stage it would recover its invested costs is to calculate how many units or how much in dollar sales is necessary for the firm to earn a profit. Consider the case of Defense Dynamics: Defense Dynamics Inc. is considering a project that will result in fixed costs of $12,000,000 and per-unit variable costs of $10.75....
Dana’s Ribbon World makes award rosettes. Following is information about the company: Variable cost per rosette...
Dana’s Ribbon World makes award rosettes. Following is information about the company: Variable cost per rosette $ 1.20 Sales price per rosette 3.00 Total fixed costs per month 3600.00 Required: 1. Suppose Dana’s would like to generate a profit of $860. Determine how many rosettes it must sell to achieve this target profit. (Round your intermediate calculations to 2 decimal places and final answer to the nearest whole number.) 2. If Dana’s sells 2,450 rosettes, compute its margin of safety...
Emma owns an Internet business where she sells weatherproof car floor mats. Her monthly fixed costs...
Emma owns an Internet business where she sells weatherproof car floor mats. Her monthly fixed costs are $40,000. The average price per unit is $25 and the average variable cost per unit is $15. What is her break-even point? Remember that your answer will be in “units,” not “dollars,” as you are finding the number of items that need to be sold in order to break even. Andrew rents rooms in his hotel for an average of $92 per night....
Question 1 Your friend from Netherlands is planning to visit you in the United States. You...
Question 1 Your friend from Netherlands is planning to visit you in the United States. You estimate the cost of her trip at $6,781. What is the cost to her in euros if 1 Euro = $1.2001? Question 2 You are planning to visit Japan in December. You estimate the cost of your trip to be $820. How many yen do you need to buy if the exchange rate is 1$ = 123.1 yen? Question 3 ABC Company has projected...
4. A company that makes optical computer input devices has calculated their revenue and costs as...
4. A company that makes optical computer input devices has calculated their revenue and costs as follows for the most recent fiscal period: Sales ​$522 000 Costs: ​Fixed Costs​ $145 000 ​Variable Costs ​208 800 Total Costs ​353 800 Net Income ​$168 200 ​What is the break-even point in sales dollars? 5. A company that makes environmental measuring devices has calculated their revenue and costs as follows for the most recent fiscal period: Sales ​$750 000 Costs: ​Fixed Costs​ $200...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT