Answered step by step
Verified Expert Solution
Question
1 Approved Answer
m Exercise 4-26 Multiple-Product Break-Even Parker Pottery produces a line of vases and a line of ceramic figurines. Each line uses the same equipment and
m
Exercise 4-26 Multiple-Product Break-Even Parker Pottery produces a line of vases and a line of ceramic figurines. Each line uses the same equipment and labour; hence, there are no traceable fixed costs. Common fixed costs equal $75,000. Parker's accountant has begun to assess the profitability of the two lines and has gathered the following data for last year: Vases Figurines Price $100 $175 Variable cost 75 105 Contribution margin $ 25 $ 70 Number of units 1,000 500 2. Parker Pottery is considering upgrading its factory to improve the quality of its products. The upgrade will add $13,150 per year to total fixed costs. If the upgrade is successful, the pro- jected sales of vases will be 1,500, and figurine sales will increase to 1,000 units. What is the new BEP in units for each of the products? Complete Exercise 4-26, and provide the required information. NOTE: to enter numeric answers, see Exercise 4-24, Question 1, for instructions. Remember to enter numeric amounts without a $ or, la comma) If the answer is $20,000.00, then enter the number as 20000 Remember to round to 2 decimal places. For numbers such as 1.456, round up to 1.46 and for numbers such as 1.452, round down to 1.45 Required: (1) The basket contribution margin is A dollars. The break-even number of packages is units. The break-even number of vases is A units. The break-even number of figurines is A units. (2) With the new information provided, the basket contribtution margin is A dollars. The new break-even number of packages is units. The new break-even number of vases is A units. The new break-even number of figurines is A units
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started