Question
Jonah Hill Company manufactures two products. Information about the two products is as follows: Product X Product Y Selling price per unit $80 $30 Variable
Jonah Hill Company manufactures two products. Information about the two products is as follows:
Product X
Product Y
Selling price per unit
$80
$30
Variable costs per unit
40
20
Contribution margin per unit
$40
$10
The company expects fixed costs to be $185,880. The firm expects 90% of its sales (in units) to be Product X and 10% to be Product Y (a sales mix of 9:1).
a. Calculate the weighted average contribution margin or contribution margin by package (4 marks)
b. Determine the breakeven point in total units, and how much would come from products X and Y (7 marks)
c. Determine the minimum level of sales (in dollars) necessary to generate operating income of $184,980 (6 marks)
d. Identify and explain 3 separate ways in which the company can use the above information to improve overall profitability. (3 marks)
Jonah Hill Company manufactures two products. Information about the two products is as follows:
Product X
Product Y
Selling price per unit
$80
$30
Variable costs per unit
40
20
Contribution margin per unit
$40
$10
The company expects fixed costs to be $185,880. The firm expects 90% of its sales (in units) to be Product X and 10% to be Product Y (a sales mix of 9:1).
a. Calculate the weighted average contribution margin or contribution margin by package (4 marks)
b. Determine the breakeven point in total units, and how much would come from products X and Y (7 marks)
c. Determine the minimum level of sales (in dollars) necessary to generate operating income of $184,980 (6 marks)
d. Identify and explain 3 separate ways in which the company can use the above information to improve overall profitability. (3 marks)
Jonah Hill Company manufactures two products. Information about the two products is as follows:
| Product X | Product Y |
Selling price per unit | $80 | $30 |
Variable costs per unit | 40 | 20 |
Contribution margin per unit | $40 | $10 |
The company expects fixed costs to be $185,880. The firm expects 90% of its sales (in units) to be Product X and 10% to be Product Y (a sales mix of 9:1).
(4 marks)
Jonah Hill Company manufactures two products. Information about the two products is as follows:
| Product X | Product Y |
Selling price per unit | $80 | $30 |
Variable costs per unit | 40 | 20 |
Contribution margin per unit | $40 | $10 |
The company expects fixed costs to be $185,880. The firm expects 90% of its sales (in units) to be Product X and 10% to be Product Y (a sales mix of 9:1).
(4 marks)
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South Western Federal Taxation 2017 Essentials Of Taxation Individuals And Business Entities
Authors: William A. Raabe, David M. Maloney, James C. Young, Annette Nellen
20th Edition
9780357109144
