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Exercise #3 Break even and special order percent Variable ratio CMR $ unit $ Summit Paintball Supply manufactures paintballs used by recreational gamers. The cost
Exercise #3 Break even and special order percent Variable ratio CMR $ unit $ Summit Paintball Supply manufactures paintballs used by recreational gamers. The cost of producing a box of 2,500 paintballs is as follows: Sales per box Direct materials Direct labor Variable factory overhead Fixed factory overhead Variable selling, general, and administrative costs Fixed selling, general, and administrative costs Total cost per unit 125.00 12.50 6.25 18.75 25.00 18.75 4.00 85.25 variable fixed total CM per unit $ The fixed factory overhead and fixed SG&A cost is allocated based on an assumption that the business will produce 400,000 boxes of paintballs per year. A B What are the total fixed costs per year? What is the breakeven point in sales $ C Management has received a special order request for 100,000 boxes of "private label" paintballs. The order specifies a per box price of $75. Should management accept the offer? Why? Exercise #3 Break even and special order percent Variable ratio CMR $ unit $ Summit Paintball Supply manufactures paintballs used by recreational gamers. The cost of producing a box of 2,500 paintballs is as follows: Sales per box Direct materials Direct labor Variable factory overhead Fixed factory overhead Variable selling, general, and administrative costs Fixed selling, general, and administrative costs Total cost per unit 125.00 12.50 6.25 18.75 25.00 18.75 4.00 85.25 variable fixed total CM per unit $ The fixed factory overhead and fixed SG&A cost is allocated based on an assumption that the business will produce 400,000 boxes of paintballs per year. A B What are the total fixed costs per year? What is the breakeven point in sales $ C Management has received a special order request for 100,000 boxes of "private label" paintballs. The order specifies a per box price of $75. Should management accept the offer? Why
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