Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribedimage text in transcribed

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 31,400 additional Sun Sound and 34,200 additional Ear Bling headphones could be sold. The income from operations by unit of product is as follows: Sun Sound Ear Bling Headphones Headphones $39.50 22.10 $17.40 Sales price Variable cost of goods sold Manufacturing margin Variable selling and administrative expenses Contribution margin Fixed manufacturing costs Income from operations $61.60 34.50 $27.10 7.90 12.30 $9.50 3.60 $5.90 $14.80 5.50 $9.30 Prepare an analysis indicating the increase or decrease in total profitability if 31,400 additional Sun Sound and 34,200 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 Prepare an analysis indicating the increase or decrease in total profitability if 31,400 additional Sun Sound and 34,200 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 Headphones Ear Bling Headphones Unit volume increase x Contribution margin per unit Increase in profitability

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

Introduction to Governmental and Not for Profit Accounting

Authors: Martin Ives, Terry K. Patton, Suesan R. Patton

7th edition

9780132776073, 132776014, 978-0132776011

More Books

Students also viewed these Accounting questions