Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Patriot Co. manufactures and sells three products: red, white, and blue. Their unit selling prices are red S65; white, S95; and blue, S120. The per

image text in transcribedimage text in transcribed

Patriot Co. manufactures and sells three products: red, white, and blue. Their unit selling prices are red S65; white, S95; and blue, S120. The per unit variable costs to manufacture and sell these products are red, $50; white, $70; and blue, $90. Their sales mix is reflected in a ratio of2:2:1 (red:white:blue). Annual fixed costs shared by all three products are S160,000. One type of raw material has been used to manufacture all three products. The company has developed a new material of equal quality for less cost. The new material would reduce variable costs per unit as follows: red, by S7; white, by S17; and blue, by 57. However, the new material requires new equipment, which will increase annual fixed costs by $30,000 Required 1. Assume if the company continues to use the old material, determine its break-even point in both sales units and sales dollars of each individual product. (Round composite units up to next whole number) 1. Determine its break-even point in both sales units and sales dollars of each individual product. etermine the selling price per composite unit. Selling price per unit Ratio Total per composite unit Red 2 White 2 Blue 11 etermine the variable costs per composite unit. Variable cost per unit Ratio Total per composite unit Red White etermine the break-even point in composite unit. Choose Numerator: Choose Denominator: Break Even Units Total fixed costs Contribution margin per unit Break even units etermine its break-even point in units and sales dollars of each individual product. Numbe Units sales at the Dollar sales at the per Number of composite units to composite break even break-even point break-even point unit White Blue

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

Recommended Textbook for

Internal Auditing Assurance And Consulting Services

Authors: Kurt F. Reding, Paul J. Sobel, Urton L. Anderson, Michael J. Head, Sridhar Ramamoorti, Mark Salamasick, Contributing Writer, Cris Ridd, Richard Tuschman

1st Edition

0894136100, 978-0894136108

More Books

Students also viewed these Accounting questions