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LOUP Tiger Co. sells pillows for $25 each. The manufacturing cost, all variable, is $10 per pillow. The company is planning on renting an exhibition
LOUP Tiger Co. sells pillows for $25 each. The manufacturing cost, all variable, is $10 per pillow. The company is planning on renting an exhibition booth for both display and selling purposes at the annual crafts and art convention. The total fixed cost of booth fee is $5,010 Required: a. Compute the breakeven point in units and in dollars. (20 points) b. What is the margin of safety ratio in %, assuming budgeted sales total $10,000? (10 points) c. What is the degree of operating leverage at sales of 400 pillows? (20 points) d. Let assume that Tiger Co. produces two different pillows, X and Y. The following information is presented for two different pillows: Y $36 $24 Selling price per unit Variable cost per unit Total fixed costs are $180,000. 28 Calculate breakeven points in units of X and Y if the sales mix is 3 units of X for every unit of Y. (25 points) LOUP Tiger Co. sells pillows for $25 each. The manufacturing cost, all variable, is $10 per pillow. The company is planning on renting an exhibition booth for both display and selling purposes at the annual crafts and art convention. The total fixed cost of booth fee is $5,010 Required: a. Compute the breakeven point in units and in dollars. (20 points) b. What is the margin of safety ratio in %, assuming budgeted sales total $10,000? (10 points) c. What is the degree of operating leverage at sales of 400 pillows? (20 points) d. Let assume that Tiger Co. produces two different pillows, X and Y. The following information is presented for two different pillows: Y $36 $24 Selling price per unit Variable cost per unit Total fixed costs are $180,000. 28 Calculate breakeven points in units of X and Y if the sales mix is 3 units of X for every unit of Y. (25 points)
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