3 24Question 30MListenPine Company makes unfinished bookcases that it sells for $62. Production costs are$36 variable and $10 fixed. Because it has unused capacity, Pine Street isconsidering finishing the bookcases and selling them for $70. Variable finishing costsare expected to be $6 per unit with no increase in fixed costs. Pine Street should sellA)B)finished bookcases: the incremental revenues exceed incremental costs by$2.00 per unit.finished bookcases: the incremental revenues exceed incremental costs by$8.00 per unit.C) unfinished bookcases: total finishing costs are %52 per unitD) unfinished bookcases: variable finishing costs are expected to be $6 per unitOE) none of the above

We need to compute net Income per unit in case unfinished bookcases are sold and finished book cases…

24 Listen Pine Company makes unfinished bookcases that it sells for $62. Production costs are $36 variable and $10 fixed. Because it has unused capacity, Pine Street is considering finishing the bookcases and selling them for $70. Variable finishing costs are expected to be $6 per unit with no increase in fixed costs. Pine Street should sell A) finished bookcases: the incremental revenues exceed incremental costs by $2.00 per unit. finished bookcases: the incremental revenues exceed incremental costs by $8.00 per unit. C) unfinished bookcases: total finishing costs are %52 per unit B) D) unfinished bookcases: variable finishing costs are expected to be $6 per unit E) none of the above

24 Listen Pine Company makes unfinished bookcases that it sells for $62. Production costs are $36 variable and $10 fixed. Because it has unused capacity, Pine Street is considering finishing the bookcases and selling them for $70. Variable finishing costs are expected to be $6 per unit with no increase in fixed costs. Pine Street should sell A) finished bookcases: the incremental revenues exceed incremental costs by $2.00 per unit. finished bookcases: the incremental revenues exceed incremental costs by $8.00 per unit. C) unfinished bookcases: total finishing costs are %52 per unit B) D) unfinished bookcases: variable finishing costs are expected to be $6 per unit E) none of the above

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter14: Capital Structure Management In Practice

Section14.A: Breakeven Analysis

Problem 5P

See similar textbooks

Similar questions

Manufacturing builds and sells switch harnesses for glove boxes. The sales price and variable cost for each follows: Their sales mix is reflected in the ratio 4:4:1. If annual fixed costs shared by the three products are $1 8840 how many units of each product will need to be sold in order forJj to break even?
Division X makes a part with the following characteristics: Production capacity 25,000 units Selling price to outside customers $18 Variable cost per unit $11 Fixed costs, total $100,000 Division Y of the same company would like to purchase 10,000 units each period from Division X. Division Y now purchases the part from an outside supplier at a price of $17 each. Suppose Division X has sufficient excess capacity to handle all of Division Y's needs without any increase in fixed costs and without cutting into sales to outside customers. If Division X refuses to accept the $17 price internally and Division Y continues to buy from the outside supplier, the company as a whole will be: better off by $60,000 each period. O worse off by $60,000 each period. worse off by $70,000 each period. better off by $10,000 each period. worse off by $20,000 each period. O O O O <
Help Save & Exit Subm The Garrison Company manufactures two products: Oxy Cleaner and Sonic Cleaner, The costs and revenues are as follows: Oxy Cleaner Sonic Cleaner Sales Price $70 $42 Variable cost per unit 40 22 Total demand for Oxy is 9,690 units and for Sonic is 6,900 units. Machine time is a scarce resource. During the year, 59,000 machine hours are available. Oxy requires 5 machine hours per unit, while Sonic requires 2.5 machine hours per unit. What is the maximum contribution margin Garrson can achieve during a year? Multiple Choice $968J0. $826,000
FRANCORP sells two products. Products M N Selling price per unit $80 $60 Less variable expenses per unit $46 $40 Contribution margin per unit $34 $20 Current demand per week (units) 2,100 2,400 Processing time required on machine XYZ per unit 2 min. 1 min. Machine XYZ is a constrained resource and is being used at 100% capacity. Machine XYZ has a capacity of 3,000 minutes per week. Which product should FRANCORP focus on? a. Product N since it provides a contribution margin net benefit of $3 per minute b. Product N since it provides a contribution margin net benefit of $3.50 per minute c. Product M since it provides a contribution margin net benefit of $2.20 per minute d. Product M since it provides less contribution margin per minute
Sell or Process Further Turner Manufacturing Company makes a partially completed assembly unit that it sells for $51 per unit. Normally, 36,000 units are sold each year. Variable unit cost data on the assembly are as follows: Direct material $12 7 Variable manufacturing overhead 9 The company is now using only 75% of its normal capacity; it could fully use its normal capacity by processing the assembly further and selling it for $59 per unit. If the company does this, material and labor costs will each increase by $2 per unit and variable overhead will go up by $1 per unit. Fixed costs will increase from the current level of $125,000 to $166,000. Direct labor Prepare an analysis showing whether Turner should process the assemblies further. Use a negative sign with answer to only indicate an income loss from processing assemblies further; otherwise do not use negative signs with your answers. Sell of Process Further Differential Analysis Differential revenue Differential costs Direct…
Question T Pawn has received a special order for 17,000 units of its product. The product normally sells for $31 and has the following manufacturing costs: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit cost Per unit 6 5 9 7 AZ Assume that Pawn has sufficient capacity to fill the order. What price should Pawn charge to make a $17,000 incremental profit? (Do not include $ sign.)
FRANCORP sells two products. Products M N Selling price per unit $80 $60 Less variable expenses per unit $46 $40 Contribution margin per unit $34 $20 Current demand per week (units) 2,100 2,400 Processing time required on machine XYZ per unit 2 min. 1 min. Machine XYZ is a constrained resource and is being used at 100% capacity. Machine XYZ has a capacity of 3,000 minutes per week. Assuming FRANCORP wants to maximize its total contribution margin, how much of each product should it produce? a. 2400 units of N and 300 units of M b. 300 units of N and 2100 units of M c. 1200 units of N and 1050 units of M d. 2400 units of N and 0 units of M
Current Attempt in Progress The fastener division of Southern Fasteners manufactures zippers and then sells them to customers for $7.80 per unit. Its variable cost is $2.97 per unit, and its fixed cost per unit is $1.55. Management would like the fastener division to transfer 11,200 of these zippers to another division within the company at a price of $2.97. The fastener division could avoid $0.43 per zipper of variable packaging costs by selling internally. Determine the minimum transfer price. (a) Assuming the fastener division is not operating at full capacity. (Round answer to 2 decimal places, e.g. 10.50.) Minimum transfer price $ (b) Assuming the fastener division is operating at full capacity. (Round answer to 2 decimal places, e.g. 10.50.) Minimum transfer price $
ress Blossom Industries incurs unit costs of $6 ($4 variable and $2 fixed) in making an assembly part for its finished product. A supplier offers to make 17,300 of the assembly part at $5 per unit. If the offer is accepted, Blossom will save all variable costs but no fixed costs. Prepare an analysis showing the total cost saving, if any, that Blossom will realize by buying the part. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Make Variable manufacturing costs $ Fixed manufacturing costs Purchase price Buy $ Total annual cost $ I $ $ The decision should be to the part. eTextbook and Media Save for Later Net Income Increase (Decrease) Attempts: 0 of 3 used Submit Answer
Sell or Process Further Turner Manufacturing Company makes a partially completed assembly unit that it sells for $54 per unit. Normally, 34,000 units are sold each year. Variable unit cost data on the assembly are as follows: Direct material $12 Direct labor Variable manufacturing overhead The company is now using only 75% of its normal capacity; it could fully use its normal capacity by processing the assembly further and selling it for $62 per unit. If the company does this, material and labor costs will each increase by $2 per unit and variable overhead will go up by $1 per unit. Fixed costs will increase from the current level of $125,000 to $164,000. Prepare an analysis showing whether Turner should process the assemblies further. Use a negative sign with answer to only indicate a loss from processing assemblies further; otherwise do not use negative signs with your answers. Sell of Process Further Differential Analysis Differential revenue Differential costs Direct material…
The Noble Company manufactures two products. Information about the two products is as follows: Product A Product B Selling price per unit $80 $30 Variable costs per unit 45 15 Contribution margin per unit $35 $15 The company expects the fixed costs to be $189,000. The firm expects 60% of its sales (in units) to be of Product A (a sales mix of 3:2). Required: A. Calculate the contribution margin per package.$fill in the blank 1 B. Determine the break-even point in units for Product A and Product B. Product A fill in the blank 2 units Product B fill in the blank 3 units C. Determine the level of sales (in dollars) necessary to generate an operating income of $135,000.$fill in the blank 4
Costner produces two product lines. Prices/costs per unit follow. "W" "H" Selling price $60 $45 Direct material $16 $12 Direct labor ($20/hour) $15 $10 Variable overhead $12 $8 Demand for "W" is 209 units and "H"is 341 units Costner has only 175 labor hours available Given the constrained resource, what is the maximum contribution margin the company can attain if it uses the optimal sales mix? Round only your final answer to the nearest dollar. Hint: Consider the financial result if the company follows your recommendations on which line to produce first and how many they would be able to produce of the other product.