EBK CORNERSTONES OF COST MANAGEMENT
3rd Edition
ISBN: 9781305147102
Author: MOWEN
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Chapter 16, Problem 23E
1.
To determine
Compute the number of units required to generate the after tax net income of $48,000.
2.
To determine
Identify the sales revenue required, if only one model of ski is being produced and still the same level of profit is met.
3.
To determine
Identify the model of skis to be produced if the sales are 12,000 pairs of either model.
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Campbell Corporation makes and sells state-of-the-art electronics products. One of its segments produces The Math Machine, an
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and expenses associated with the segment's operating activities. The relevant range for the production and sale of the calculators is
between 35,000 and 68,000 units per year.
Revenue (37,000 units x $9.00)
Unit-level variable costs
Materials cost (37,000 × $2.00)
Labor cost (37,000 × $1.00)
Manufacturing overhead (37,000 × $0.70)
Shipping and handling (37,000 × $0.34)
Sales commissions (37,000 × $1.00)
Contribution margin
Fixed expenses
Advertising costs
Salary of production supervisor
Allocated company-wide facility-level expenses
Net loss
$333,000
(74,000)
(37,000)
(25,900)
(12,580)
(37,000)
146, 520
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a. A large discount store has approached the owner of Campbell about buying 6,000 calculators. It would replace…
Vernon Corporation makes and sells state-of-the art electronics products. One of its segments produces the math machine, an in expensive calculator. The company's chief accountant recently prepared the following income statement showing annual revenues and expnses associated with the segment's operating activities. The relevant range for the production and sale of the range for the production and sale of the calculators is between 33,000 and 71,000 units per year.
Revenue (47,000 unitsx9.00) $423,000
Unit-level variable costs
Materials cost (47,000x$2.00) ($94,000)
labor cost (47,000x1.00) ($47,000)
manufacturing overhead (47,000x $0.20) ($9,400)
shipping and handling (47,000x $0.24) ($11,280)
Sales commissions (47,000x$2.00) ($94,000)
contribution margin $167,320
Fixed expenses
Advertising costs ($30,000)
Salary of production supervisor ($66,000)
Allocated company-wide facility-level expenses ($82,000)
Net loss ($10,680)
Required
A) A large discount store has approached the…
Rundle Corporation makes and sells state-of-the-art electronics products. One of its segments produces The Math Machine, an
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between 32,000 and 72,000 units per year.
Revenue (35,000 units x $12.00)
Unit-level variable costs
Materials cost (35,000 x $3.00)
Labor cost (35,000 x $2.00)
Manufacturing overhead (35,000 x $0.20)
Shipping and handling (35,000 x $0.28)
Sales commissions (35,000 × $2.00)
Contribution margin
Fixed expenses
Advertising costs
Salary of production supervisor
Allocated companywide facility-level expenses
Net loss
Required
$ 420,000
(105,000)
(70,000)
(7,000)
(9,800)
(70,000)
158,200
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Chapter 16 Solutions
EBK CORNERSTONES OF COST MANAGEMENT
Ch. 16 - Prob. 1DQCh. 16 - Describe the difference between the units-sold...Ch. 16 - Define the term break-even point.Ch. 16 - Explain why contribution margin per unit becomes...Ch. 16 - A restaurant owner who had yet to earn a monthly...Ch. 16 - What is the variable cost ratio? The contribution...Ch. 16 - Prob. 7DQCh. 16 - Suppose a firm with a contribution margin ratio of...Ch. 16 - Prob. 9DQCh. 16 - Explain how CVP analysis developed for single...
Ch. 16 - Prob. 11DQCh. 16 - How do income taxes affect the break-even point...Ch. 16 - Explain how a change in sales mix can change a...Ch. 16 - Explain how a change in sales mix can change a...Ch. 16 - Prob. 15DQCh. 16 - Prob. 1CECh. 16 - Prob. 2CECh. 16 - Health-Temp Company is a placement agency for...Ch. 16 - Olivian Company wants to earn 420,000 in net...Ch. 16 - Vandenberg, Inc., produces and sells two products:...Ch. 16 - Prob. 6CECh. 16 - Prob. 7CECh. 16 - Prob. 8ECh. 16 - Gelbart Company manufactures gas grills. Fixed...Ch. 16 - Schylar Pharmaceuticals, Inc., plans to sell...Ch. 16 - Prob. 11ECh. 16 - Prob. 12ECh. 16 - Big Red Motors, Inc., employs 15 sales personnel...Ch. 16 - Sports-Reps, Inc., represents professional...Ch. 16 - Campbell Company manufactures and sells adjustable...Ch. 16 - Prob. 16ECh. 16 - Sara Pacheco is a sophomore in college and earns a...Ch. 16 - Carmichael Corporation is in the process of...Ch. 16 - Choose the best answer for each of the following...Ch. 16 - Prob. 20ECh. 16 - Income statements for two different companies in...Ch. 16 - Prob. 22ECh. 16 - Prob. 23ECh. 16 - Busy-Bee Baking Company produces a variety of...Ch. 16 - Prob. 25ECh. 16 - Prob. 26ECh. 16 - Prob. 27ECh. 16 - Prob. 28ECh. 16 - Prob. 29ECh. 16 - Prob. 30ECh. 16 - Prob. 31PCh. 16 - More-Power Company has projected sales of 75,000...Ch. 16 - Consider the following information on four...Ch. 16 - Hammond Company runs a driving range and golf...Ch. 16 - Prob. 35PCh. 16 - Faldo Company produces a single product. The...Ch. 16 - Katayama Company produces a variety of products....Ch. 16 - Prob. 38PCh. 16 - Prob. 39PCh. 16 - Prob. 40PCh. 16 - Salem Electronics currently produces two products:...Ch. 16 - Good Scent, Inc., produces two colognes: Rose and...
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