Matt's Mattress Company sells several types of mattresses. The company incurs $243,000 in fixed expenses every month. Information about pricing and variable costs for each mattress type is provided below. Sales Price 800 1,050 1,200 Description Firm Standard Memory-Foam Monthly Sales Volume 400 240 160-125 Variable Cost 450 600 725 REQUIREMENT C: Matt's Mattress' managers have determined the changes below will impact their current breakeven point (and hange the numbers in the table at the top of the page). • The company will stop selling Firm mattresses which will cause sales volume of 'standard mattresses to increase to 375 units • Memory-foam mattress variable cost will increase by $25. • They are considering increasing sales prices on Memory Foam to $1,300. • As a result of the company no longer selling firm mattresses, fixed cost decrease by $53,000 (to $190,000 total) ing this information, what is the company's new breakeven point in units. SHOW YOUR WORK! eakeven Point in Units

Matt's Mattress Company sells several types of mattresses. The company incurs $243,000 in fixed expenses every month. Information about pricing and variable costs for each mattress type is provided below. Sales Price 800 1,050 1,200 Description Firm Standard Memory-Foam Monthly Sales Volume 400 240 160-125 Variable Cost 450 600 725 REQUIREMENT C: Matt's Mattress' managers have determined the changes below will impact their current breakeven point (and hange the numbers in the table at the top of the page). • The company will stop selling Firm mattresses which will cause sales volume of 'standard mattresses to increase to 375 units • Memory-foam mattress variable cost will increase by $25. • They are considering increasing sales prices on Memory Foam to $1,300. • As a result of the company no longer selling firm mattresses, fixed cost decrease by $53,000 (to $190,000 total) ing this information, what is the company's new breakeven point in units. SHOW YOUR WORK! eakeven Point in Units

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter7: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 46E: Lotts Company produces and sells one product. The selling price is 10, and the unit variable cost is...

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Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The cost of placing an order is 30. The cost of holding one unit of inventory for one year is 15.00. Currently, Ottis places 160 orders of 4,000 plastic housing units per year. Required: 1. Compute the economic order quantity. 2. Compute the ordering, carrying, and total costs for the EOQ. 3. How much money does using the EOQ policy save the company over the policy of purchasing 4,000 plastic housing units per order?
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Markson and Sons leases a copy machine with terms that include a fixed fee each month plus acharge for each copy made. Markson made 9,000 copies and paid a total of $480 in January. In April, they paid $320 for 5,000 copies. What is the variable cost per copy if Markson uses the high-low method to analyze costs?
Jansen Crafters has the capacity to produce 50,000 oak shelves per year and is currently selling 44,000 shelves for $32 each. Cutrate Furniture approached Jansen about buying 1,200 shelves for bookcases it is building and is willing to pay $26 for each shelf. No packaging will be required for the bulk order. Jansen usually packages shelves for Home Depot at a price of $1.50 per shell. The $1.50 per-shelf cost is included in the unit variable cost of $27, with annual fixed costs of $320.000. However, the $130 packaging cost will not apply in this case. The fixed costs will be unaffected by the special order and the company has the capacity to accept the order. Based on this information, what would be the profit if Jansen accepts the special order? A. Profits will decrease by $1,200. B. Profits will increase by $31,200. C. Profits will increase by $600. D. Profits will increase by $7,200.
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