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Bill Johnson, sales manager, and Diane Buswell, controller, at Current Designs are beginning to analyze the cost considerations for one of the composite models of
Bill Johnson, sales manager, and Diane Buswell, controller, at Current Designs are beginning to analyze the cost considerations for one of the composite models of the kayak division. They have provided the following production and operational costs necessary to produce one composite kayak. $200 per kayak $200 per kayak $180 per kayak Kevlar Resin and supplies Finishing kit (seat, rudder ropes, etc.) Direct Labor Selling and administrative expenses-variable Selling and administrative expenses-fixed Manufacturing overhead-fixed $430 per kayak $500 per kayak $176.350 per year $270.000 per year Bill and Diane have asked you to provide a cost-volume-profit analysis to help them finalize the budget projections for the upcoming year. Bill has informed you that the selling price of the composite kayak will be $2,300. Calculate unit variable costs. Unit variable costs $ per unit eTextbook and Media Attempts: 0 of 3 used Submit Answer Save for Later Using multiple attempts will impact your score 10% score reduction after attempt 2 (b) Determine the unit contribution margin. Contribution margin $ per unit eTextbook and Media Attempts: 0 of 3 used Submit Answer Save for Later Using multiple attempts will impact your score 10% score reduction after attempt 2 (c) Using the unit contribution margin, determine the break-even point in sales units for this product line. Break-even point units eTextbook and Media Attempts: 0 of 3 use mit Answer Save for Later Using multiple attempts will impact your score 10% score reduction after attempt 2 (d) Assume that Current Designs would like to earn net income of $308,100 on this product line. Using the unit contribution margin, calculate the number of units that need to be sold to achieve this goal. Number of units to be sold units (e) Based on the most recent sales forecast Current Designs expects to sell 1,000 units of this model. Calculate the margin of safety in dollars and the margin of safety ratio. (Round percentage to 2 decimal places, 25.50%) Margin of safety $ Margin of safety ratio 9
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