Question

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

Answer #1

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 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 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 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 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 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 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 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 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...

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 . . . . . . . . . . . . . . . . . . . . .
. $ 6.00
$
7.50
Variable expenses per unit . . . . . . . . . . . . . . .
. . $ 2.40
$
5.25...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 16 seconds ago

asked 16 minutes ago

asked 20 minutes ago

asked 20 minutes ago

asked 23 minutes ago

asked 37 minutes ago

asked 44 minutes ago

asked 44 minutes ago

asked 44 minutes ago

asked 45 minutes ago

asked 52 minutes ago

asked 53 minutes ago