Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. change in sales mix and contribution margin head p

Change in Sales Mix and Contribution Margin Head Pops Inc. manufactures two models of solar-powered,...

80.2K

Verified Solution

Question

Accounting

Change in Sales Mix and Contribution Margin

Head Pops Inc. manufactures two models of solar-powered, noise-canceling headphones: Sun Sound and Ear Bling models. The company is operating at less than full capacity. Market research indicates that 18,900 additional Sun Sound and 20,800 additional Ear Bling headphones could be sold. The income from operations by unit of product is as follows:

Sun Sound Headphones Ear Bling Headphones
Sales price $30.80 $48.00
Variable cost of goods sold 17.20 26.90
Manufacturing margin $13.60 $21.10
Variable selling and administrative expenses 6.20 9.60
Contribution margin $7.40 $11.50
Fixed manufacturing costs 2.80 4.30
Income from operations $4.60 $7.20

Prepare an analysis indicating the increase or decrease in total profitability if 18,900 additional Sun Sound and 20,800 additional Ear Bling headphones are produced and sold, assuming that there is sufficient capacity for the additional production. Round your per unit answers to two decimal place.

Head Pops Inc.
Analysis
Sun Sound Headphone Ear Bling Headphone
Unit volume increase
x Contribution margin per unit $ $
Increase in profitability $ $

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Statistics
1.2K views

What is the real difference between between correlation and regression analysis? I see that correlation allows...

Psychology
1.2K views

If a patient was misdiagnosed with a mental illness can this diagnosis or label hurt them,...

General Management
1.2K views

The landmark case in negligence law is Palsgraf vs. Long Island Railroad Co., 162 N.E. 99...

Basic Math
1.2K views

The voltage across a certain inductor is V 18 91 30 0 50 0 135...

Statistics
1.2K views

The data in the table represent the tuition for all 2 year community colleges in...

Calculus
1.2K views

4 Let V be the vector space of real polynomials with inner product 1 f...

Accounting
1.2K views

the corporate form of business is an entity separate from its owners. this means that...

Accounting
1.2K views

A machine costing $207,400 with a four-year life and an estimated $17,000 salvage value is...

Accounting
1.2K views

You are on a job interview for an auditor position at a CPA firm. The...

Accounting
1.2K views

A. $0.61 B. $0.53 C. $0.96 D. $1.67

Accounting
1.2K views

One full-color, quarter-page ad in POLICE Magazine costs $1,805 and reaches nearly 50,000 subscribers. What...

Finance
1.2K views

The future value of $50 deposited each year for 6 years earning 7 percent would...