Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. during a skype session with tom and tony, you ment

During a Skype session with Tom and Tony, you mention that your current cost model in...

60.1K

Verified Solution

Question

Accounting

During a Skype session with Tom and Tony, you mention that yourcurrent cost model in accounting is break-even analysis. They arenot following your explanation, but they say they will swing bywith some cookies for a discussion. More cookies! This is payingoff, except for those extra pounds.

Selling price to Juicy Cookies at $10 per tin. The cost is $8per tin, which includes $6 of direct material and $1.50 of directlabor. Annual manufacturing overhead is estimated at $100,000 forthe expected sales of 200,000 tins. Operating expenses areprojected to be $80,000 annually.

After looking over the costs for manufacturing overhead andoperating expenses, you approximate that 85% of manufacturingoverhead and 20% of operating expenses are variable costs.

1. What is the TOTAL fixed cost?

2. What is the TOTAL variable cost?

3. What is the contribution margin per UNIT? (Do notround.)

4. How many units are necessary to reach break-even?(Always round up to the next unit for break-even, since youcannot sell a partial unit.)

5. Tony is concerned that they will not be able to sell200,000 tins of cookies. Given 200,000 tins as their expected saleslevel, what is the decrease of total sales dollars that they endurebefore they incur a net loss?

Answer & Explanation Solved by verified expert
3.7 Ratings (554 Votes)
    See Answer
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

Accounting
1.2K views

Contribution MarginVariance, Contribution Margin Volume Variance, Market ShareVariance, Market Size VarianceSulert, Inc., produces...Contribution MarginVariance,...

Medical Sciences
1.2K views

Hi. This is a question for my summer neuroscience class. Q: Discuss the structure of distributed...

Biology
1.2K views

Which sentence incorrectly uses an apostrophe to show possession A Can I go over to...

Basic Math
1.2K views

Given angle A=47.03925 and angle B=7527'30", then Angle A= Sec. and Angle B= Deg.. Min.___...

Basic Math
1.2K views

Given circle V with diameter TU and radius VR. RS is tangent to V at...

Calculus
1.2K views

25T b If s 4 and P s represent points on the unit circle find...

Algebra
1.2K views

Below are the average high temperatures for each month in Baltimore, Maryland.Month Jan...

Accounting
1.2K views

Henriksen Co., which produces and sells biking equipment, is financed as follows: ...

Accounting
1.2K views

(20 marks) Question 4 Earnings Management I&N Pty Ltd have recently opened a new store...

Accounting
1.2K views

Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on...

Accounting
1.2K views

A firm's income statement included the following data. Fill in the missing components on the...

Accounting
1.2K views

The collection of an account receivable will cause total assets to decrease. Select one: True...