Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Spring Farms grows and sells strawberries, blueberries, raspberries, and blackberries.Annual fixed costs are $325,000.Variable costs are $0.75 per pint of strawberries, $0.87 per pint of

Spring Farms grows and sells strawberries, blueberries, raspberries, and blackberries.Annual fixed costs are $325,000.Variable costs are $0.75 per pint of strawberries, $0.87 per pint of blueberries, $0.95 per pint of raspberries, and $0.43 per pint of blackberries.Strawberries sell for $1.15 per pint, blueberries sell for $1.42 per pint, raspberries sell for $1.55 per pint, and blackberries sell for $0.95 per pint.Five pints of strawberries are produced and sold for every three pints of blueberries, two pints of raspberries, and one pint of blackberries.

a.What is Spring's weighted average contribution margin?Show your work.

b.For the expected product mix, how many pints does Spring need to sell next year to achieve a pretax target profit of $55,000?Show your work.

c.Spring effective tax rate is 30%.For the expected product mix, how many pints must Spring sell to achieve an after-tax target profit of $75,000?Show your work.

d.Suppose Spring has a bumper crop of raspberries, resulting in four pints of raspberries produced and sold for every three pints of strawberries, every two pints of blueberries produced and sold, and every pint of blackberries.How many pints must Spring sell to achieve break-even at this product mix?Show your work.

image text in transcribed

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_2

Step: 3

blur-text-image_3

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

Corporate Financial Reporting And Analysis

Authors: S David Young, Jacob Cohen, Daniel A Bens

4th Edition

111949463X, 9781119494638

More Books

Students also viewed these Accounting questions

Question

Do not go, wait until I come

Answered: 1 week ago

Question

Pay him, do not wait until I sign

Answered: 1 week ago