Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the contribution margin per unit and the breakeven point

image text in transcribedimage text in transcribed

Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the contribution margin per unit and the breakeven point in units for CB3668, both before and after the proposed reengineering project. Assume all setup costs are included in fixed overhead. (Round "Contribution margin per unit" to 2 decimal places and "Breakeven" answers to the nearest dollar amount.) Current Plan Proposed Plan Contribution margin per unit Breakeven units units The CB3668 is the company's main product and it is used in computers with enhanced user interface requirements. The average price for the CB3668 is $102. If the firm is successful, it might be able to raise prices, but it also might have to reduce the price because of increased competition. The firm expects to sell 230,000 units in the coming year, and sales are expected to increase in the following years. The future for CG appears to be optimistic, but the company is nascent and working capital requirements are high. As is always the case cash flow is crucial to the continued success of the company. CG management is considering a significant reengineering project to significantly change the plant and manufacturing process. The project's objective is to increase the number of purchased parts (to about 65%) and to reduce the complexity of the manufacturing process. This would also permit CG to remove some leased equipment and to sell some of the most expensive equipment in the plant. CG currently manufactures 230,000 units of their main product. Broken out on a per unit basis, the key components of full costs is as follows: Current Proposed Manufacturing Costs Manufacturing Costs $ 6.00 $ 15.00 12.50 14.00 25.00 30.00 40.00 20.00 Materials and purchased parts Direct labor Variable overhead Fixed overhead Manufacturing information for 3668: Number of setups Batch size Cost per setup Machine hours 3,160 50 300 2,460 50 300 62,000 $ $ 96,000 General, selling, and administrative costs are $10 variable cost per unit and $1,250,000 fixed; these costs are not expected to differ for either the current or the proposed manufacturing plan. Required 1. Compute the contribution margin per unit and the breakeven point in units for CB3668, both before and after the proposed reengineering project. Assume all setup costs are included in fixed overhead

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

Students also viewed these Accounting questions

Question

Does it have at least one-inch margins?

Answered: 1 week ago

Question

Does it highlight your accomplishments rather than your duties?

Answered: 1 week ago