HW 2

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Georgia State University *

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8145

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Accounting

Date

Apr 3, 2024

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docx

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3

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2-31: a. Break-Even: ALLIGATORS DOLPHINS TOTAL SELLING PRICE/UNIT $20 $25 $200,000 VARIABLE COST/UNIT $8 $10 FIXED COST $1.29 M $1.29M # OF UNITS SOLD 140,000 60,000 CONTIBUTION MARGIN $12 $15 SALE MIX 70% 30% WEIGHTED AVERAGE $8.4 $4.50 Total Breakeven Unit Sales = $1.29M + 0 / (8.4 + 4.5) = 100,000 Number of Alligator = 70,000 or 70% of 100,000 (Multiple by assumed product mix) Number of Dolphins = 30,000 or 30% of 100,000 b. Break-Even: ALLIGATORS DOLPHINS SELLING PRICE/UNIT $20 $25 VARIABLE COST/UNIT $8 $10 FIXED COST $1.29 M $1.29M # OF UNITS SOLD 60,000 140,000 CONTIBUTION MARGIN $12 $15 SALE MIX 30% 60% WEIGHTED AVERAGE $3.60 $10.50 Total Breakeven Unit Sales = $1.29M + 0 / (3.6 + 10.5) = 91,490 Number of Alligator = 27,447or 30% of 91,490 Number of Dolphins = 64,043 or 70% of 91,490 c. Explain why the total number of toys from (a) is the same/different from (b). The weighted average contribution margin in part (a) is 12.9 which is higher than the contribution margin in part (b) 12.6. The higher the total weighted average contribution margin, the fewer total units are required to achieve the breakeven point.
2-40: Contribtution M $ 12.00 Fixed Cost $ 4,500,000.00 # of Units Sold 500,000.00 Revenue $ 15,000,000.00 Expense $ 13,500,000.00 Profit $ 1,500,000.00 After Tax Incom $ 1,050,000.00 Break Even $ 375,000.00 c. 3-25: FAB Motor's Cost Per Unit Direct Materials $ 80.00 Direct Labor $ 60.00 Variable Overhead Cost $ 56.00 Fixed Overhead Cost $ 17.00 Total Cost $ 213.00 Superior Comressor Price $ 200.00 3-48:  Capacity level, profitability, opportunity cost. Wedmark's Corporation Cupertino. California, plant manufactures chips used in personal computers. Its practical capacity is 2,000 chips per week, and fixed costs are $75,000 per week. The selling price is $500 per chip. Production this quarter is 1,600 chips per week. At this level of production, variable costs are $720,000. a. What will the plant's profit per week be if it operates at practical capacity? Sales = 2000 x 500 = 1,000,000 Less variable cost = 900000 (2000 x 720000/1600) Contribution margin = 100000 Less: fixed cost = 75000
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