Question

Cranberry Wood Products Inc. spends an average of $9.30 in labor and $12.60 in materials on...

Cranberry Wood Products Inc. spends an average of $9.30 in labor and $12.60 in materials on every unit it sells. Sales commissions and shipping amount to another $3.10. All other costs are fixed and add up to $149,000 per month. The average unit sells for $32.00.

  1. What is Cranberry's contribution? Round the answer to two decimal places.
    $

    What is Cranberry's contribution margin? Round the answer to two decimal places.
    %
  2. What is the firm's breakeven point in units? Round the answer to the nearest whole number.
    units
  3. Calculate the dollar breakeven point. Do not round intermediate calculations. Round the answer to the nearest whole dollar.
    $
  4. Sketch the breakeven diagram.
Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

a. Contribution per unit = Sales Price - Variable Price =

Selling Price 32
Variable Costs
Labor -9.3
Materials -12.6
Sales Commission &
Shipping -3.1
Contribution per Unit 7.0

b. Breakeven Point in Units = Fixed Costs / Contribution per unit = 149000 / 7 = 21285.7 = 21286 Units

c. Dollar Breakeven point = 21286 * 32 = 681,152 $

d. Break even Graph

Units Sold Contribution Fixed Costs Profit / (Loss)
15000 105000 149000 -44000
18000 126000 149000 -23000
21285.71429 149000 149000 0
24000 168000 149000 19000
26000 182000 149000 33000
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
Problem 14-10 Cranberry Wood Products Inc. spends an average of $10.50 in labor and $12.00 in...
Problem 14-10 Cranberry Wood Products Inc. spends an average of $10.50 in labor and $12.00 in materials on every unit it sells. Sales commissions and shipping amount to another $2.50. All other costs are fixed and add up to $146,000 per month. The average unit sells for $32.00. What is Cranberry's contribution? Round the answer to two decimal places. $ What is Cranberry's contribution margin? Round the answer to two decimal places. % What is the firm's breakeven point in...
Assume MIX Inc. has sales volume of $1,162,000 for two products with May sales and contribution...
Assume MIX Inc. has sales volume of $1,162,000 for two products with May sales and contribution margin ratios as follows: Product A: Sales $454,000; Contribution Margin Ratio 30% Product B: Sales $708,000; Contribution Margin Ratio 60% Required: Assume MIX’s fixed expenses are $318,000. Calculate the May total contribution margin, operating income, average contribution margin ratio, and breakeven sales volume. (Round "Average contribution margin ratio" answer to 2 decimal places. Round up "Breakeven sales volume" answer to nearest whole dollar.)
Problem 3-28 The Sheridan Company sells sports decals that can be personalized with a player’s name,...
Problem 3-28 The Sheridan Company sells sports decals that can be personalized with a player’s name, a team name, and a jersey number for $9.00 each. Sheridan buys the decals from a supplier for $2.50 each and spends an additional $0.70 in variable operating costs per decal. The results of last month’s operations are as follows: Sales revenue $13,500 Cost of goods sold 3,750 Gross profit 9,750 Operating expenses 3,200 Operating income $6,550 calculate contribution margin per unit. (Round answer...
Holly Inc. sells a single product for $230. Variable costs include $115 for each unit plus...
Holly Inc. sells a single product for $230. Variable costs include $115 for each unit plus a 8% sales commission. Fixed costs are $205,800 per month. a. What is the contribution margin percentage? (Round final answer to 2 decimal places.) b. What is the breakeven sales revenue? (Round final answer to the nearest whole dollars.) c. What sales revenue is needed to achieve a $276,000 per month profit? (Round final answer to the nearest whole dollars.)
Martinez Company’s relevant range of production is 7,500 units to 12,500 units. When it produces and...
Martinez Company’s relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Average Cost Per Unit Direct materials $ 6.30 Direct labor $ 3.80 Variable manufacturing overhead $ 1.50 Fixed manufacturing overhead $ 4.00 Fixed selling expense $ 3.30 Fixed administrative expense $ 2.00 Sales commissions $ 1.00 Variable administrative expense $ 0.50 11. If 8,000 units are produced, what is the total amount of...
Contribution Margin Ratio, Break-Even Sales Revenue, Sales Revenue for Target Profit Schylar Pharmaceuticals, Inc., plans to...
Contribution Margin Ratio, Break-Even Sales Revenue, Sales Revenue for Target Profit Schylar Pharmaceuticals, Inc., plans to sell 140,000 units of antibiotic at an average price of $17 each in the coming year. Total variable costs equal $761,600. Total fixed costs equal $7,500,000. Required: 1. What is the contribution margin per unit? Round your answer to the nearest cent. $ What is the contribution margin ratio? Round your answer to two decimal places. (Express as a decimal-based answer rather than a...
[The following information applies to the questions displayed below.] Martinez Company’s relevant range of production is...
[The following information applies to the questions displayed below.] Martinez Company’s relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 6.10 Direct labor $ 3.60 Variable manufacturing overhead $ 1.40 Fixed manufacturing overhead $ 4.00 Fixed selling expense $ 3.10 Fixed administrative expense $ 2.10 Sales commissions $ 1.10 Variable administrative expense $ 0.55 13. If the...
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...
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...
XYZ is the maker of high quality golf bags. The company currently has three different lines...
XYZ is the maker of high quality golf bags. The company currently has three different lines of bags, which it sells to sporting goods stores and golf shops throughout the world. XYZ sells a constant mix of 1 medium-sized bags for 2 small bag and 4 medium bags for 3 large-sized bag. Total fixed costs for the year are expected to be 2027562 Note: round all decimals to three places in the computation Small Medium Large Selling price per bag...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT