Question

Exercise 20-17 Tharp Company operates a small factory in which it manufactures two products: C and...

Exercise 20-17

Tharp Company operates a small factory in which it manufactures two products: C and D. Production and sales results for last year were as follows.

C D
Units sold 9,000 19,900
Selling price per unit $94 $75
Variable cost per unit 53 39
Fixed cost per unit 20 20


For purposes of simplicity, the firm averages total fixed costs over the total number of units of C and D produced and sold.

   The research department has developed a new product (E) as a replacement for product D. Market studies show that Tharp Company could sell 11,100 units of E next year at a price of $115; the variable cost per unit of E is $42. The introduction of product E will lead to a 11% increase in demand for product C and discontinuation of product D. If the company does not introduce the new product, it expects next year’s results to be the same as last year’s.

Compute company profit with products C & D and with products C & E.

Net profit with products C & D $
Net profit with products C & E $



Should Tharp Company introduce product E next year?

YesNo

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Alpha company manufactures and sells two products: Product A and Product B. The following costs were...
Alpha company manufactures and sells two products: Product A and Product B. The following costs were incurred during the company’s first year of operations: Variable cost per unit: Product A Product B Direct materials $7 $6 Direct labor $9 $7 Variable manufacturing overhead $4 $7 Variable selling and administrative cost $5 $3 Fixed cost per year: Fixed manufacturing overhead $320,000 $270,000 Fixed selling and administrative cost $210,000 $150,000 During the year, the company produced 27,000 units of product A and...
Chelonia Ltd manufactures small robot toys. It plans to introduce two products, Speedie and Spunkie. It...
Chelonia Ltd manufactures small robot toys. It plans to introduce two products, Speedie and Spunkie. It is anticipated that the product mix will be 40% Speedie and 60% Spunkie. One unit of Speedie will be sold for $100, with variable cost equals $40. For a unit of Spunkie, the selling price will be $120 and the variable cost is $70. The fixed cost for producing the two products is $108 000. a. What is the break-even point in units for...
Bobby Co. sells two products, X and Y. Last year, Bobby sold 18,000 units of X's...
Bobby Co. sells two products, X and Y. Last year, Bobby sold 18,000 units of X's and 12,000 units of Y's. The unit selling price, variable cost per unit, and contribution margin per unit for the company’s two products are provided below. Product Selling Price Variable Cost per unit Contribution Margin per unit X $180 $100 $80 Y $100 $60 $40 Assuming that last year’s fixed costs totaled $160,000. What was Bobby Co's break-even point in units of enterprise product...
BM Company sells two products, X and Y. Product X sells for $20 per unit with...
BM Company sells two products, X and Y. Product X sells for $20 per unit with variable costs of $11 per unit. Product Y sells for $30 per unit with variable costs of $16 per unit. During this period, BM sold 16,000 units of X and 4,000 units of Y, making Total Revenue of $440,000, and after subtracting variable cost got Total Contribution Margin of $200,000, and after subtracting Total Fixed Cost of $110,000, earned Operating Profit of $90,000. The...
(Ch6) BM Company sells two products, X and Y. Product X sells for $20 per unit...
(Ch6) BM Company sells two products, X and Y. Product X sells for $20 per unit with variable costs of $11 per unit. Product Y sells for $30 per unit with variable costs of $16 per unit. During this period, BM sold 16,000 units of X and 4,000 units of Y, making Total Revenue of $440,000, and after subtracting variable cost got Total Contribution Margin of $200,000, and after subtracting Total Fixed Cost of $110,000, earned Operating Profit of $90,000....
(Ch6) BM Company sells two products, X and Y. Product X sells for $20 per unit...
(Ch6) BM Company sells two products, X and Y. Product X sells for $20 per unit with variable costs of $11 per unit. Product Y sells for $30 per unit with variable costs of $16 per unit. During this period, BM sold 16,000 units of X and 4,000 units of Y, making Total Revenue of $440,000, and after subtracting variable cost got Total Contribution Margin of $200,000, and after subtracting Total Fixed Cost of $110,000, earned Operating Profit of $90,000....
BM Company sells two products, X and Y. Product X sells for $20 per unit with...
BM Company sells two products, X and Y. Product X sells for $20 per unit with variable costs of $11 per unit. Product Y sells for $30 per unit with variable costs of $16 per unit. During this period, BM sold 16,000 units of X and 4,000 units of Y, making Total Revenue of $440,000, and after subtracting variable cost got Total Contribution Margin of $200,000, and after subtracting Total Fixed Cost of $110,000, earned Operating Profit of $90,000. The...
BM Company sells two products, X and Y. Product X sells for $20 per unit with...
BM Company sells two products, X and Y. Product X sells for $20 per unit with variable costs of $11 per unit. Product Y sells for $30 per unit with variable costs of $16 per unit. During this period, BM sold 16,000 units of X and 4,000 units of Y, making Total Revenue of $440,000, and after subtracting variable cost got Total Contribution Margin of $200,000, and after subtracting Total Fixed Cost of $110,000, earned Operating Profit of $90,000. When...
Exercise 6-4 Basic Segmented Income Statement [LO6-4] Royal Lawncare Company produces and sells two packaged products—Weedban...
Exercise 6-4 Basic Segmented Income Statement [LO6-4] Royal Lawncare Company produces and sells two packaged products—Weedban and Greengrow. Revenue and cost information relating to the products follow: Product Weedban Greengrow Selling price per unit $ 9.00 $ 32.00 Variable expenses per unit $ 2.80 $ 13.00 Traceable fixed expenses per year $ 132,000 $ 39,000 Common fixed expenses in the company total $102,000 annually. Last year the company produced and sold 40,500 units of Weedban and 20,000 units of Greengrow.
O'?Neill's Products manufactures a single product.? Cost, sales, and production information for the company and its...
O'?Neill's Products manufactures a single product.? Cost, sales, and production information for the company and its single product is as? follows: -Selling price per unit is $53 -Variable manufacturing costs per unit manufactured (includes direct materials [DM], direct labor [DL], and variable MOH $27 -Variable operating expenses per unit sold $1 -Fixed manufacturing overhead (MOH) in total for the year $64,000 -Fixed operating expenses in total for the year $91000 -Units manufactured and sold for the year 8,000 units Requirement...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT