Question

Question 2 051 Accounting Updates View Policies Show Attemot History Current Attempt in Progress ences brations PLUS Support Three years ago, Marissa Moore started a business that creates and delivers a nd birthday gift baskets to students at the local i ty Marissa seils the baskets for $26 each and the variable costs are $16 per basket. She incurs $12.000 in fixed costs each Your answer is correct How many baskets wil Mark e tose this year if she wants to earn $2100 in operating Income? (Round answer to decimal places.es 5.275.) e Textbook and Media Attempts: 1 of 12 used Your answer is incorrect Last year, Marso 250 and she believes that demand this year will be stable at 3.850 banks. The following are the action Marissa could take if she wants to earn $28.100 in Operating income byl y 350 basket Consider each action independendy (Round per unit answers to 2 decimal places 52.75 and fixed cost to decimal places. e. 5.275) Raise selling priceper Reduce variable costs per un to Reduce costs to e Textbook and Media Assistance Used Save forster Lastved 14 nutes ago Attempts: 1 of 12 sed Submit

Answer 1

(b)
Sales Revenue for $28100 Operating income = $28100+12400+3850x16 = $102100
Selling price per unit = $102100 / 3850 = $26.52

Variable Cost for $28100 Operating income = 3850x26-(28100+12400) = $59600
Variable Cost per unit = $59600/3850 = $15.48

Fixed Costs for $28100 Operating Income = 3850 x 10 - 28100 = $10400

(d)
Revised Contribution margin per unit = $26 - $16.44 = $9.56 per unit
Break even units = $12400 / $9.56 = 1298 units

Break even units (dollars) = 1298 x $26 = $33748