Question

1 )Coronado Industries has two divisions; Sporting Goods and Sports Gear. The sales mix is 65% for Sporting Goods and 35% for Sports Gear. Coronado incurs $6105000 in fixed costs. The contribution margin ratio for Sporting Goods is 30%, while for Sports Gear it is 50%. The break-even point in dollars is

$2258850.

$14197674.

$16500000.

$15262500.

2)Reynoso Corporation manufactures titanium and aluminum tennis racquets. Reynoso’s total overhead costs consist of assembly costs and inspection costs. The following information is available:

Cost	Titanium	Aluminum	Total Cost
Assembly	500 mach. hours	500 mach. hours	$60000
Inspections	350	150	$92000
	2100 labor hours	1900 labor hours

Reynoso is considering switching from one overhead rate based on labor hours to activity-based costing.
Using activity-based costing, how much assembly cost is assigned to titanium racquets?

$31500.

3)Reynoso Corporation manufactures titanium and aluminum tennis racquets. Reynoso’s total overhead costs consist of assembly costs and inspection costs. The following information is available:

Cost	Titanium	Aluminum	Total Cost
Assembly	500 mach. hours	500 mach. hours	$72000
Inspections	350	150	$110000
	2100 labor hours	1900 labor hours

Reynoso is considering switching from one overhead rate based on labor hours to activity-based costing.
Total overhead costs assigned to titanium racquets, using a single overhead rate, are

$110000.

$95550.

$91000.

$127400.

$30000.

$42000.

$16800.

Answer 1

Q1.
Answer is 16500,000
Explanation:
Weighted Contribution margin ratio = 30%*0.65+50%*0.35 = 37%
Break even sales:
Fixed cost					61,05,000
Divide: Weighted average contribution margin ratio	37%
Break even sales:				16500000
Q2.
Answer is $30,000
Explanation:
Activity rate for Assembly:
Total cost of assembly	60,000
Divide: Total MH		1000
Activity rate of Assembly	60
Multiply: MH used in Titanium	500
Assembly cost of titanium	30000
Q3.
Answer is $95,550
Explanation:
Total OH			182000
Divide: DLH		4000
OH rate per DLH		45.5
Multiply: DLH used in Titanium	2100
OH aplied to Titanium	95550