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Question 3 The following is budgeted information for the XYZ Corporation Product 1 Product 2 Annual Production and Sales Units 3,000 1,000 Independent Variable X
Question 3 | |||||
The following is budgeted information for the XYZ Corporation | |||||
Product 1 | Product 2 | ||||
Annual Production and Sales Units | 3,000 | 1,000 | Independent Variable X | ||
Projected Selling Price | $55 | $120 | Variable | ||
Direct Production Cost Information: | |||||
Materials (per unit) | $9 | $16 | Variable | ||
Direct Labor (per unit) | $15 | $25 | Variable | ||
Additional Information: | |||||
Selling and administrative costs (a mixed cost) are budgeted to be | $75,400.00 | ||||
The variable component cost (for both products) / unit = | $4.00 | Given (Multiply this x units = total variable cost) | |||
Manufacturing overhead cost (a mixed cost) are budgeted to be | $90,000 | at the production and sales listed above | |||
The fixed component = | $66,000 | Given (Therefore the difference must be total variable cost) | |||
Each product uses the same amount of variable manufacturing overhead per unit. | |||||
Asuming the budgeted sales mix remains intact, how many units of each product does XYZ need to sell in order to break even? | |||||
Preliminary Goals: | |||||
Preliminary Goal 1: Find total Fixed Costs and Variable Costs/Unit | |||||
Preliminary Goal 2: Find contribution margin per unit to determine break even units |
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