Homework Answers
| Total fixed costs = ( 9100 + 19600 ) * 25 | 717500 |
| For products C & D : | |||
| C | D | Total Company | |
|
Sales ( units sold * Selling price per unit ) |
864500 ( 9100*95 ) |
1470000 ( 19600*75 ) |
2334500 |
|
(-) Variable cost ( units sold * Variable cost per unit ) |
473200 ( 9100*52 ) |
764400 ( 19600*39 ) |
1237600 |
| Contribution margin | 391300 | 705600 | 1096900 |
| (-) Total fixed costs | 717500 | ||
| Net profit | 379400 |
| For products C & E : | |
| Revised unit sales of Product C = Current unit sales * ( 1 + Increase % ) = 9100 * ( 1 + 11% ) | 10101 |
| C | E | Total company | |
|
Sales ( units sold * Selling price per unit ) |
959595 ( 10101 * 95 ) |
1288000 ( 11200 * 115 ) |
2247595 |
|
(-) Variable cost ( units sold * Variable cost per unit ) |
525252 ( 10101*52 ) |
448000 ( 11200*40 ) |
973252 |
| Contribution margin | 434343 | 840000 | 1274343 |
| (-) Total fixed costs | 717500 | ||
| Net profit | 556843 |
| Net profit with products C & D | 379400 |
| Net profit with products C & E | 556843 |
| Should Tharp company introduce product E next year ? |
| Yes |
| Reason : As introducing product E will give more profits to the company. |
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Exercise 21-17 Tharp Company operates a small factory in which it manufactures two products: C and...
Tharp Company operates a small factory in which it manufactures two products: C and D. Production...
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. Units sold Selling price per unit Variable cost per unit Fixed cost per unit C D 9,100 19,000 $94 $75 47 41 20 20 For purposes of simplicity, the firm averages total fixed costs over the total number of units of Cand D produced and sold. The research department has developed a new product(E) as...
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QUESTION 25 Carter Co. sells two products, Arks and Bins. Last year, Carter sold 14,000 units...
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Exercise 7-4 Basic Segmented Income Statement [LO7-4] Royal Lawncare Company produces and sells two packaged products—Weedban...
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Royal Lawncare Company produces and sells two packaged products-Weedban and Greengrow. Revenue and cost information relating...
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Ine manufactures two different products. For many years, the company has been profitable and operates at full capacity. However, in the last two years le prices were reduced and selling expenses increased because of the competition. Budgeted data for next year are the followings: 20.000 $220 $130 AZ 10.000 $140 $100 Sales in units Sale price per unit Variable manufacturing costs Variable selling expenses Fixed MOH Fixed Selling expenses $30 $10 $600,000 $200.000 $400,000 $100,000 Additional information: a) All the...
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