Question

Victor Company makes a single product. The company has monthly fined consta $700.000 Vale costs of 5.30 per unit. Each unit of product is sold for $35. Brevard expects to sell 25.000 min 2. What is the monthly operating profil 19. Refer a chibit $175.000 S675.000 None of the answer claices is correct sales price increases to percent Refer to Exhibit 2. What would be the operating profit if the S112. 23.500 None of the answer choices is correct 21. Refer to Exhibit 6-2. What would be the operating profit if the unit variable cost decreases 20 percent $75.000 275.000 S100000 d SI0000 None of the answer choices is correct. 22. Refer to Exhibit 6-2. What would be the operating profit if total fixed costs decreases 20 percent? 12.500 bS135.000 c. S215.000 d S315.000 None of the answer choices is correct 23. Designer Jackets, Inc. produces blazers and has the following data available on these products. Sales price per unit $ 250 Variable cost per unit 100 Fixed costs per month 15,000 Tax rate 25 percent (8 Points) (1) How many units must be sold to carn a monthly profit of $180,000 after taxes (2) How many sales dollars are required to earn a monthly profit of $180,000 after taxes? 24. The local nonprofit youth symphony is planning a concert fundraiser. The organization estimates that 550 tickets can be sold for S16 per person. The fixed costs are $720. The local chamber of commerce office will process ticket orders for a fee of $4 per ticket, to relieve the youth symphony of this responsibility. (15 Points) (2) (3) How many tickets does your organization have to sell to break even? How many tickets does your organization have to sell to eam a profit of $4,320? How much must your organization have in sales dollars to break even (rounded to the nearest cent? How much must your organization have in sales dollars to earn a profit of $4,320 (rounded to the nearest cent)? What is the organization's margin of safety in units and in sales dollars? (4) (5) 25. Assume that Snowmobile Company produces two products: Racer and Cruiser. Below are the data for each: Selling price Variable cost Racer $6,000 3,600 Cruiser S4,000 2,650 In the past, Snowmobiles had difficulty finding skilled workers. However, the company recently hired additional labor, thereby eliminating this resource constraint. The company now is faced with limited available machine-hours. It has a total of 4,000 machine-hours available each month. The Racer requires 50 machine-hours per unit and the Cruiser requires 15 machine-hours per unit. (9 Points) (1) (2) (3) What is the contribution margin provided by each product? Calculate the contribution margin per unit of constrained resource for each model. Which model would the company prefer to sell to maximize overall company profit?

how?

Answer 1

19)
Sales Revenue (25,000 units * $35 per unit)	$875,000
Less: Variable costs (25,000 units * $20 per unit)	($500,000)
Contribution Margin	$375,000
Less: Fixed Costs	($200,000)
Operating Profit	$175,000
Therefore, the correct option is C) $175,000.
20)
Sales Revenue ($35 per unit*110/100 = $38.50 * 25,000 units)	$962,500
Less: Variable costs (25,000 units * $20 per unit)	($500,000)
Contribution Margin	$462,500
Less: Fixed Costs	($200,000)
Operating Profit	$262,500
Therefore, the correct option is D) $262,500.
21)
Sales Revenue (25,000 units * $35 per unit)	$875,000
Less: Variable costs ($20 per unit*80/100 = $16 * 25,000 units))	($400,000)
Contribution Margin	$475,000
Less: Fixed Costs	($200,000)
Operating Profit	$275,000
Therefore, the correct option is B) $275,000.
22)
Sales Revenue (25,000 units * $35 per unit)	$875,000
Less: Variable costs (25,000 units * $20 per unit)	($500,000)
Contribution Margin	$375,000
Less: Fixed Costs ($200,000*80/100)	($160,000)
Operating Profit	$215,000
Therefore, the correct option is E) None of the answer choices is correct because operating profit is $275,000.

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