Patriot Company manufactures flags in two sizes, small and large. The company has total fixed costs of $270,000 per year. Additional data follow. Sales price per unit Variable costs per unit Sales nix percent Small $ 26 $18 80% Large $38 $ 20 20% The company is considering buying new equipment that would increase total fixed costs by $47,900 per year and reduce the variable costs of each type of flag by $1 per unit. Required: 1. Compute the weighted-average contribution margin without the new equipment. 2. Assume the new equipment is not purchased. Determine the break-even point in total sales units and the break-even point in units for each product. 3. Assume the new equipment is purchased. Compute the break-even point in total sales units and the number of units to sell for each product. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the weighted-average contribution margin without the new equipment. Weighted-average contribution margin
Patriot Company manufactures flags in two sizes, small and large. The company has total fixed costs of $270,000 per year. Additional data follow. Sales price per unit Variable costs per unit Sales nix percent Small $ 26 $18 80% Large $38 $ 20 20% The company is considering buying new equipment that would increase total fixed costs by $47,900 per year and reduce the variable costs of each type of flag by $1 per unit. Required: 1. Compute the weighted-average contribution margin without the new equipment. 2. Assume the new equipment is not purchased. Determine the break-even point in total sales units and the break-even point in units for each product. 3. Assume the new equipment is purchased. Compute the break-even point in total sales units and the number of units to sell for each product. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the weighted-average contribution margin without the new equipment. Weighted-average contribution margin
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter16: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 10E: Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of 22...
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