Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

5. Hip-Hop Company manufactures and markets several products. Management is considering the future of one product, electronic keyboards, that have not been as profitable as

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
5. Hip-Hop Company manufactures and markets several products. Management is considering the future of one product, electronic keyboards, that have not been as profitable as planned. Since this product is manufactured and marketed independently of the other products, its total costs can be precisely measured. Next year's plans call for a $840 selling price per unit. The fixed costs for the year are expected to be $126,000, up to a capacity of 2,100 units. Forecasted variable costs are $630 per unit. a) Using four levels of production, populate the table below and use it to plot a CVP chart. Label on the CVP chart: the Total Costs line, Sales line, Break-even Point, Loss Area, and Profit Area. x30 Costs Total Fixed Variable Units Total Sales 2G,oco 0 189,oc0 316, 000 120,0co 300 752, co0 G93, cce 756, aco 561,cco $00 126,000 ,200, cco 1,323,0co ,764, GeO 126,000 2100 ,750 1,SOD 1,250 ,000 750 500 a50 300 boo 900 1800 I 200 1500 UNITS b) Show the calculation for the break-even point in units and sales dollars FC Break-even units (2 6,C00 So Cm/unit Break-even sales $ (5,0001$)0 c) Prepare a contribution margin income statement for keyboards at the break-even point Hip-Hop Company Keyboards Contribution Margin Income Statement at Break-even Sen le 1t66,0c0 eanibaien Marern 11 3Nc cost Piked 24c Fneems Trez Company Income Statement (Absorption Costing) for the year ended August 31, 2019 $8,000,000 Sales (80,000 units @$100) Cost of Goods Sold Beginning Inventory COG Manufactu red (100,000 units @ $45) $0 4,500,000 $4,500,000 COG available for sale Ending Inventory (20,000 @ $45) 900,000 Cost of Goods Sold 3,600,000 Gross Margin Selling & Admin $4,400,000 1,150,000 ,0,eee $3.250,000 3310, oco Net Income Additional information: Production units: 100,000 Umis seld 80, 0co Selling and Administrative expenses: Annual Fixed expense $800,000 $3.50 (l,ce) Variable per unit $ 18.00 per unit $ 14.00 per unit $ 3.00 per unit $.00 per unit Direct materials Direct labor Variable FOH Fixed FOH ($1,000,000 total)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions