Existing Profit Statement
Particulars Standard Deluxe Pro Total
Sales Units 100000 50000 50000
Selling Price p.u. $30 $40 $50
(-)Variable Manu. Cost p.u. ($17) ($20) ($25)
(-) Sales Commission ($3) ($4) ($5)
Contribution p.u. $10 $16 $20
Total Contribution $1000000 $800000 $1000000 $2800000
(-)Fixed Manu Cost ($800000)
(-)Fixed Selling & Admin Cost ($400000)
Total Profit $1600000
(a) Revised Sales Units 95000 (100000-5%) 65000(50000+30%) 50000 210000
Revised Contribution p.u. $10 $12.4($36-$20-$3.6) $20
Total Contribution $950000 $806000 $1000000 $2756000
(-)Fixed Manu Cost ($800000)
(-)Fixed Selling & Admin Cost ($400000)
Total Profit $1556000
Total Profit is reduced by $44000 ($1600000-$1556000)
(b) Revised Sales units 102000 51000 51000
Contribution p.u. $10 $16 $20
Total Contribution $1020000 $816000 $1020000 $2856000
(-)Fixed Manu Cost ($800000)
(-)Fixed Selling & Admin Cost [$400000+$50000] ($450000)
Total Profit $1606000
Total profit increased by $6000($1606000-$1600000)
(c)Yes ,This is in the best interest of the company. As the Higher Priced Product Pro Contribution per unit is also higher i.e. $20. So if the sales force push the production of Higher Price Product the overall contribution will increase.
2-50 What-if analysis Tenneco Inc. produces three models of tennis rackets: standard, deluxe, and pro. Following...
Tenneco Inc. produces three models of tennis rackets: standard, deluxe, and pro. Following are the sales and cost information for last year: item standard deluxe pro sales (in units) 100,000 50,000 50,000 sales price per unit $30 $40 $50 variable manufacturing cost per unit $17 $20 $25 Fixed manufacturing costs are $800,000, and fixed selling and administrative costs are $400,000. In addition, the company pays its sales representatives a commission equal to 10% of the price of each racket sold....
Topper Sports, Incorporated, produces high-quality sports equipment. The company’s Racket Division manufactures three tennis rackets—the Standard, the Deluxe, and the Pro—that are widely used in amateur play. Selected information on the rackets is given below: StandardDeluxeProSelling price per racket$ 70.00$ 106.00$ 160.00Variable expenses per racket:Production$ 42.00$ 53.00$ 64.00Selling (5% of selling price)$ 3.50$ 5.30$ 8.00 All sales are made through the company’s own retail outlets. The Racket Division has the following fixed costs: Per MonthFixed production costs$ 160,000Advertising expense140,000Administrative salaries90,000Total$ 390,000 Sales, in units,...
19 Athletic Sports, Inc., produces high-quality sports equipment. The company's Racket Division manufactures two tennis rackets -the Standard and the Deluxe-that are widely used in amateur play. Selected information on the rackets is given below Standard S47.70 Deluxe Selling price per racket Variable expenses per racket 84.00 Production Selling S21.40 S2.45S 28.10 5.50 Sales in units over the past two months have been as follows; Deluxe 3,000 3,500 Standard April May 5,000 4,000 All sales are made through the company's...
17 Athletic Sports, Inc., produces high-quality sports equipment. The company's Racket Division manufactures two tennis rackets-the Standard and the Deluxe-that are widely used in amateur play. Selected information on the rackets is given below: 84.00 Standard 47.70 Deluxe 84.00 47.10 $ $ Selling price per racket Variable expenses per racket: Production Sales commission 28.10 $ $ 50.96 $ $ 21.40 2.45 5.50 501 CH 23.85 Sales in units over the past two months have been as follows: Standard April 5,000...
Topper Sports, Inc., produces high-quality sports equipment. The company's Racket Division manufactures three tennis rackets—the Standard, the Deluxe, and the Pro—that are widely used in amateur play. Selected information on the rackets is given below: Standard $ 45.00 Deluxe $ 70.00 Pro $100.00 Selling price per racket Variable expenses per racket: Production Selling (54 of selling price) $ 27.00 $ 2.25 $ 35.00 $ 3.50 $ 36.00 $ 5.00 All sales are made through the company's own retail outlets. The...
answer all the questions wilt the solution 1. Topper Sports, Inc. produces high-quality sports equipment. The company's Racket Division manufactures three tennis rackets-the Standard, the Deluxe, and the Pro-that are widely used in amateur play. Selected information on the rackets is given below: Standard Deluxe Pro $41.00 $62.00 81.00 Selling price per racket Variable expenses per racket Production Selling (5% of selling price) $ 16.40 $21.70 $24 30 S 2.05 3.10 4.05 All sales are made through the company's own...
Pappy's Toys makes two models of a metal toy—Standard and DeLuxe. Both models are produced on a single machine. The price and costs of the two models appear as follows. Standard DeLuxe Price per unit $ 100 $ 120 Variable cost per unit $ 44 $ 48 Machine hours per unit 0.5 1.5 The one machine that used to produce both models has a capacity of 102,000 machine-hours per quarter. Fixed manufacturing costs per quarter are $860,000. Required: a. Suppose...
Q5. Dersyn Corporation produces and sells two models of vacuum cleaners, Standard and Deluxe. The company records show the following monthly data relating to these two products: Standard $150 $120 $16 Deluxe $165 $126 $13 Selling Price per Unit Variable Production Costs Variable Selling Expense per Unit Expected Monthly Sales in Units Total Monthly Fixed Cost (Common to Both) 1,200 600 $15,000 Calculate the break-even in sales dollars for the expected sales mix. Show all your calculations
Pappy's Toys makes two models of a metal toy—Standard and DeLuxe. Both models are produced on a single machine. The price and costs of the two models appear as follows. Standard DeLuxe Price per unit $ 140 $ 160 Variable cost per unit $ 60 $ 64 Machine hours per unit 0.5 1.5 The one machine that used to produce both models has a capacity of 110,000 machine-hours per quarter. Fixed manufacturing costs per quarter are $900,000. Required: a. Suppose...
Pappy's Toys makes two models of a metal toy—Standard and DeLuxe. Both models are produced on a single machine. The price and costs of the two models appear as follows. Standard DeLuxe Price per unit $ 100 $ 120 Variable cost per unit $ 44 $ 48 Machine hours per unit 0.5 1.5 The one machine that used to produce both models has a capacity of 102,000 machine-hours per quarter. Fixed manufacturing costs per quarter are $860,000. Required: a. Suppose...