Answer:
8 units
Explanation:
P = $68 per unit
MC = 9q
Fixed cost = $60
It is noted that seller can sell as much as a product at $68 per unit. This means that the firm is price taken, hence, it is case of perfect competition.
For a perfectly competitive firm, the optimal output is at: P = MC
i.e. 68 = 9q
=> q = 68/9
=> q = 7.556
> q = 8
So, the optimal output level is 8 units.
The 2018 income statement for John's Gym shoes that depreciation expense is $20 million, EBIT is $80 million, and taxes are $24 million. At the end of the year, the balance of gross fixed assets was $102 million. The increase in net operating working capital during the year was $18 million. John's free cash flow for the year was $41 million. What was the beginning of year balance for gross fixed assets
Answer:
$85 million
Explanation:
Operating cash flow = EBIT - Taxes + Depreciation
Operating cash flow = $80 million - $24 million + $20 million
Operating cash flow = $76 million
Free cash flow = Operating cash flow - Investment in operating capital
$41 million = $76 million - Investment in operating capital
Investment in operating capital = $76 million - $41 million
Investment in operating capital = $35 million
Investment in operating capital = Change in Gross fixed assets + Change in Net operating working capital
$35 million = ($102 million - Beginning of year gross fixed assets) + $18 million
Beginning of year gross fixed assets = $102 million - $35 million + $18 million
Beginning of year gross fixed assets = $85 million
MC Qu. 113 Kayak Company uses a job order costing... Kayak Company uses a job order costing system and allocates its overhead on the basis of direct labor costs. Kayak Company's production costs for the year were: direct labor, $35,000; direct materials, $55,000; and factory overhead applied $6,500. The overhead application rate was:
Answer:
$0.19 per direct labor hour
Explanation:
It is important to keep in mind the following :
Overhead application rate = Budgeted Overheads ÷ Budgeted Activity
also,
Applied Overheads = Overhead application rate x Actual Activity
Using the formula :
Applied Overheads = Overhead application rate x Actual Activity
hence,
Overhead application rate = Applied Overheads ÷ Actual Activity
therefore,
Overhead application rate = $6,500 ÷ $35,000
= $0.185 or $0.19 per direct labor hour
The Cherrywood Fine Furniture Company finds itself with excess capacity in its plant and equipment for furniture manufacturing. This excess capacity will be useful in Group of answer choices
Answer: related diversification project
Explanation:
Related diversification simply means the scenario whereby a firm moves into a new industry which possesses vital similarities with the existing industry of the firm.
In this case, since Cherrywood Fine Furniture Company has excess capacity in its plant and equipment for furniture manufacturing, then this can be used for related diversification project.
Prepare journal entries for each transaction and identify the financial statement impact of each entry.
The financial statements are automatically generated based on the journal entries recorded.
Assume Adams Services began the year with the following balances: Cash, $41,000;
Accounts receivable, $11,200; and Common stock, $52,200.
Jan. 1 Leslie Adams invested $21,200 cash in the company in exchange for common stock.
Jan. 2 The company provided services to a client and immediately received $4,500 cash.
Jan. 3 The company received $11,200 cash from a client in payment for services to be provided next year.
Jan. 4 The company received $5,900 cash from a client in partial payment of accounts receivable.
Jan. 5 The company borrowed $11,000 cash from the bank by signing a note payable.
Answer:
Cash (Dr.) $21,200
Common Stock (Cr.) $21,200
Cash (Dr.) $4,500
Services to client (Cr.) $4,500
Cash (Dr.) $11,200
Unearned Revenue (Cr.) $11,200
Cash (Dr.) $5,900
Accounts Receivable (Cr.) $5,900
Cash (Dr.) $11,000
Notes Payable (Cr.) $11,000
Explanation:
Adams services may record these transactions as journal entries. The transactions may have some changes after they are recorded then adjusting entries will be prepared to reflect the correct effect of transaction on business activities.
Paul, the Director of Recruitment at an insurance company, finds that the company has a disparate impact on the proportion of Hispanic employees compared to the proportion of Hispanics in the labor market. Which of the following steps should Paul take to solve the problem most efficiently?
a) He should lower the job specifications for Hispanic applicants.
b) He should continue using the current recruiting practices because only organizations with affirmative action plans are required to meet EEO guidelines.
c) He should start advertising for job openings on the local Spanish radio station.
d) He should freeze the hiring process until qualified Hispanics apply for vacant positions
Answer: c) He should start advertising for job openings on the local Spanish radio station.
Explanation:
This realization by Paul should make him want to hire more Hispanics into the company and the best way to do so would be to advertise it in such a way that Hispanics have a better chance of hearing about job openings.
Advertising on Spanish radio would ensure that Hispanics hear the advertisements because they are the main ethnicity that speaks Spanish. This will give them an edge in learning about job openings and enable Paul to hire more Hispanics.
Six engineering students have an idea for a new product that they plan to launch in 3 years after graduation. In three years, each engineer will need $7,500 to begin the venture. How much should be invested by each student each year if the interest rate is 6%
Answer:
Annual deposit= $2,355.82
Explanation:
Giving the following information:
Number of periods (n)= 3 years
Future Value (FV)= $7,500
Interest rate (i)= 6%
To calculate the annual deposit, we need to use the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
Isolating A:
A= (FV*i)/{[(1+i)^n]-1}
A= (7,500*0.06) / [(1.06^3) - 1]
A= $2,355.82
Nabax has an investment that is worth $41,600 and has an expected return of 14.56 percent. The investment is expected to pay her $27,200 in 2 years from today and X in 5 years from today. What is X?
Answer:
The answer is "$41189.19"
Explanation:
Using formula:[tex]\text{Present value=Cash flows} \times \text{Present value of discounting factor(rate \ \%, time period)}[/tex]
[tex]\to 41600=\frac{27200}{1.1456^2}+ \frac{X}{1.1456^5}\\\\\to 41600= (27200 \times 0.761963188)+(X \times 0.506798097)\\\\\to 41600=20725.3987+(X \times 0.506798097)\\\\\\to X=\frac{(41600-20725.3987)}{0.506798097}\\\\[/tex]
[tex]=\$41189.19[/tex]
How to evaluate the creditworthiness of customers both individual consumers and business customers?
Answer:
Here are six ways to determine creditworthiness of potential customers.Assess a Company's Financial Health with Big Data. ..Review a Businesses' Credit Score by Running a Credit Report. ...Ask for References. ..check the Businesses' Financial Standings. ...Calculate the Company's Debt-to-Income Ratio. ...Investigate Regional Trade Risk.Explanation:
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Answer:
The three most commonly used credit reporting agencies that measure creditworthiness are Experian, TransUnion, and Equifax.
Credit helps you purchase a home, lease a car, rent an apartment, etc. Credit is very important, but also very dangerous. Mistakes you make will have a lasting impact that will stay on your credit report for years. NEVER max out a credit card, it will greatly impact your score and any future loans you need for the next several years following the max out.
Credit, in my experience and opinion, is really for lenders to see how responsible of a spender you are.
Explanation:
My answer for Plato
Retained earnings, December 31, 2012 $ 306,800 Cost of equipment purchased during 2013 29,000 Net loss for the year ended December 31, 2013 4,000 Dividends declared and paid in 2013 14,300 Decrease in cash balance from January 1, 2013, to December 31, 2013 11,100 Decrease in long-term debt in 2013 14,000 Required: From the above data, calculate the retained earnings balance as of December 31, 2013. (Negative amounts should be indicated by a minus sign.)
Answer:
$288,500
Explanation:
Particulars Amount
Retained Earnings Dec 31, 2012 $306,800
Less: Net Loss for the Year $4,000
Less: Dividend declared and paid in 2013 $14,300
Retained Earnings Dec 31, 2013 $288,500
Calculate the company's breakeven point revenue based on the information below: Total fixed cost 2000 Total variable cost 5000 Sales price/unit 15 Contribution margin 65% 2836 4500 3250 3077
Answer: 3077
Explanation:
Based on the information given, the company's breakeven point revenue based on the information below will be calculated as:
Breakeven point = Fixed cost / Contribution margin ratio
= 2000/65%
= 2000/0.65
= 3077
Therefore, the answer is 3077
Two employees are suspended for three days for a fight that violated the Human Resource policies of the facility. This behavior would be
Answer:
workplace misbehavior
Explanation:
In simple words, Any deliberate employee activity that is theoretically detrimental to the company or people inside the organisation is referred to as workplace misbehavior. Such misbehavior might vary from pumping noisy audio just to upset employees to verbal hostility and job sabotage, many of which can cause chaos in any workplace.
This behavior is a kind of "Workplace misbehavior".
Such deliberate employee behavior, which may hurt the corporation or organizations as well as individuals inside the company, is termed Workplace misbehavior.These conducts could maximum range from music blasting to aggravate employees, psychological hostility, and sabotage, which in any business can lead to disaster.
Thus the above response is correct.
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Which of the following entries could be considered as an adjusting entry? Group of answer choices Debit to Cash and Credit to Revenues Debit to Cash and Credit to Liabilities Credit to Cash and Debit to Expenses Debit to Expenses and Credit to Liabilities
Answer:
The entry that could be considered as an adjusting entry is:
Debit to Expenses and Credit to Liabilities
Explanation:
For example, to accrue salaries expenses in an accounting period when the cash payments have not been made, the Salaries Expenses account is debited with the amount of the unpaid salaries while the corresponding credit entry goes to the Salaries Payable account. Depreciation expense is also debited while the corresponding credit entry is made in the accumulated depreciation account.
A standard cost _____ indicates the amount of direct labor, direct materials and overhead for one unit of product. Multiple choice question. card variance rate report
Answer:
card
Explanation:
A standard cost card can be regarded as card that encompass all the itemization or list of overhead, labor and standard amounts of materials, which is required in creating one unit of a product. This card can multiplies quantities that is been required to get to the total standard cost of a product and standard cost of each of the items.
It should be noted that standard cost
card indicates the amount of direct labor, direct materials and overhead for one unit of product.
Networked organizations are so closely linked online that each can find out what the others are doing instantaneously, as an event takes place. These organizations operate
Answer: b. in real time
Explanation:
When something is said to operate in real time, it means that is is happening instantaneously. Networked organizations that are so closely linked that their actions are seen instantaneously are therefore operating in real time.
These organizations can be in multiple countries but doing work on a similar platform. For instance, people around the world could be working on a single Go-0gle Sheets file and seeing the changes they all make in real time.
Networked organizations are so closely linked online that each can find out what the others are doing instantaneously, as an event takes place. These organizations operate in real-time. Hence option B is correct.
The key characteristic of networked organizations is their ability to access and exchange information rapidly, allowing them to respond quickly to changes and make informed decisions.
In networked organizations, individuals, teams, departments, or even entire organizations are connected through digital networks and communication platforms.
This enables them to share data, knowledge, and resources in real-time, fostering collaboration, coordination, and synergy among different entities.
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Networked organizations are so closely linked online that each can find out what the others are doing instantaneously, as an event takes place. These organizations operate
a. as inverted organizations.
b. in real time
c. as digital natives
Cliff Company traded in an old truck for a new one. The old truck had a cost of $290,000 and accumulated depreciation of $87,000. The new truck had an invoice price of $293,000. Huffington was given a $200,000 trade-in allowance on the old truck, which meant they paid $93,000 in addition to the old truck to acquire the new truck. If this transaction has commercial substance, what is the recorded value of the new truck
Answer:
203,000
Explanation:
Is the answer to this question
In order to use moving averages to forecast a time series, the first step is to select the order k, the number of time series values to be included in the moving average.
a) true
b) false
The Devon Motor Company produces automobiles. On April 1st the company had no beginning inventories and it purchased 8,000 batteries at a cost of $80 per battery. It withdrew 7,600 batteries from the storeroom during the month. Of these, 100 were used to replace batteries in cars being used by the company’s traveling sales staff. The remaining 7,500 batteries withdrawn from the storeroom were placed in cars being produced by the company. Of the cars in production during April, 90 percent were completed and transferred from work in process to finished goods. Of the cars completed during the month, 30 percent were unsold at April 30th. Required: 1. Determine the cost of batteries that would appear in each of the following accounts on April 30th.
Question Completion:
a) raw materials
b) work in process
c) finished goods
d) cost of goods sold
e) selling expense
Answer:
The Devon Motor Company
The cost of batteries that would appear in each of the following accounts on April 30th:
a) raw materials = $32,000
b) work in process = $60,000
c) finished goods = $162,000
d) cost of goods sold = $378,000
e) selling expense = $8,000
Total cost of batteries purchased = $640,000
Explanation:
a) Data and Calculations:
Beginning inventory = 0
Purchase of batteries = 8,000 at $80 = $640,000
Used batteries = 7,600
Ending inventory = 400 at $80 = $32,000 raw materials
Used batteries = 7,600:
Selling expenses = 100 * $80 = $8,000
Work in process = 7,500
Ending WIP = (7,500 - 6,750) * $80 = $60,000
Finished goods = 90% 6,750 * $80 = $540,000
Ending inventory 30% 2,025 * $80 = $162,000
Cost of goods sold 70% 4,725 * $80 = $378,000
What advice would you offer to entrepreneurs on a limited advertising budget?
Buy the biggest magazine ad you can, even if it means you can only run it once.
Run smaller, less visible ads more frequently in the best medium for your target audience.
Focus on television advertising.
Focus on radio advertising.
Answer:
Run smaller, less visible ads more frequently in the best medium for your target audience.
Explanation:
An entrepreneur refers to an individual who sees a need or discovers a problem in a society and innovatively proffers a solution using brilliant ideas or entrepreneurial thinking.
The following are five (5) characteristics of an entrepreneur;
1. Innovative: it can be defined as a quality possessed by an individual or group of people such as an entrepreneur and typically involves the process of improving on an existing product or ideas.
2. Passionate: believing in a course and one's ability to achieve much more at a business.
3. Risk-Taker: he or she is confident enough to venture into risky businesses with the hope of an expected success.
4. Self-confident: he or she is bold and believes in his or her abilities to excel.
5. Well-rounded leader: it involves being compassionate, fun, organized and intelligent as a successful entrepreneur.
Advertisement refers to the promotional multimedia messages designed and developed to make the products or services of a company known to its customers and potential customers.
Basically, the advice I would offer to entrepreneurs on a limited advertising budget is to run smaller, less visible adverts (ads) more frequently in the best medium for their target audience because they wouldn't have to pay more to put their goods out there.
Bethany Jones is a real estate agent who specializes in the luxury home market in the Orlando, FL, area. Bethany is highly technical and uses many types of online marketing techniques to increase business. One of most successful online marketing techniques is to place a rectangular graphic display along the top of real estate websites and luxury custom furniture websites. What type of marketing technique is Bethany using
Answer:
a Banner Ad
Explanation:
The type of marketing technique that Bethany is using is known as a Banner Ad. This is one of many types of ads that can be found on websites. Banner Ads are usually located at the top of the website and are shaped as long rectangles. They are also the most popular type of website ads since they are the biggest and most upfront, meaning that it is usually the first thing that visitors to the site see. This ultimately leads to the largest possible number of viewers of the ads, which in term translates to a high click through rate.
Bed & Bath, a retailing company, has two departments—Hardware and Linens. The company’s most recent monthly contribution format income statement follows: Department Total Hardware Linens Sales $ 4,300,000 $ 3,130,000 $ 1,170,000 Variable expenses 1,403,000 994,000 409,000 Contribution margin 2,897,000 2,136,000 761,000 Fixed expenses 2,250,000 1,350,000 900,000 Net operating income (loss) $ 647,000 $ 786,000 $ (139,000 ) A study indicates that $378,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue even if the Linens Department is dropped. In addition, the elimination of the Linens Department will result in a 20% decrease in the sales of the Hardware Department. Required: What is the financial advantage (disadvantage) of discontinuing the Linens Department?
Answer:
Bed & Bath
The financial disadvantage of discontinuing the Linens Department is:
= $1,004,000.
Explanation:
a) Data and Calculations:
Department Total Hardware Linens
Sales $ 4,300,000 $ 3,130,000 $ 1,170,000
Variable expenses 1,403,000 994,000 409,000
Contribution margin 2,897,000 2,136,000 761,000
Fixed expenses 2,250,000 1,350,000 900,000
Net operating income (loss) $ 647,000 $ 786,000 $ (139,000 )
The financial disadvantage of discontinuing the Linens Department is:
Allocated fixed costs = $378,000
Hardware sales lost = 626,000 ($3,130,000 * 20%)
Total disadvantage = $1,004,000
If average household income increases by 20%, from $50,000 to $60,000 per year, the quantity of rooms demanded at the Triple Sevens from rooms per night to rooms per night. Therefore, the income elasticity of demand is , meaning that hotel rooms at the Triple Sevens are
Answer:
Therefore, the income elasticity of demand is 0.83, meaning that hotel rooms at the Triple Sevens are normal goods and necessities.
Explanation:
Note: This question is not complete as some data in it are missing. The complete question is therefore provided before answering the question as follows:
If average household income increases by 20%, from $50,000 to $60,000 per year, the quantity of rooms demanded at the Triple Sevens rises from 300 rooms per night to 350 rooms per night. Therefore, the income elasticity of demand is __________, meaning that hotel rooms at the Triple Sevens are__________.
The explanation of the answer is now provided as follows:
Percentage change in income = 20%
Percentage change in quantity of rooms demanded = ((350 - 300) / 300) * 100 = 16.67%
Income elasticity of demand = Percentage change in quantity of rooms demanded / Percentage change in income = 16.67% / 20% = 0.83
Since the income elasticity of demand is positive but less than one, this implies that hotel rooms at the Triple Sevens are normal goods and necessities.
Therefore, the income elasticity of demand is 0.83, meaning that hotel rooms at the Triple Sevens are normal goods and necessities.
The specific pace and quota of work and tight surveillance indicate that company 1 has a(n) _______ culture.
Question options:
-traditional
-contingency
-androgynous
-mechanistic
-organic
Answer:
mechanistic
Explanation:
The mechanistic culture in an organization is one that works by strict rules, structure and guidelines. It is different from the organic culture that is more open and flexible. Mechanistic organizations are characterized by hierarchy and bureaucracy, specifying labour divisions for it's employees in a formal, close-knitted and "mechanistic" approach. mechanistic organizations can be found among older organizations such as universities, hospitals, government organizations etc. Organic organizations can be found among newer organizations such as tech companies.
In a mechanistic culture-based organization, the specific pace, quota of work and tight surveillance are indicator that the company practice such culture.
The mechanistic culture is usually adopted by organization because its works by strict rules, structure and guidelines.
Mechanistic organizations can be found among older organizations such as universities, hospitals, government organizations etc.
In conclusion, the specific pace and quota of work and tight surveillance indicate that company 1 has a mechanistic culture,
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Sales have decreased for two consecutive quarters at your business. You have been instructed to inform your sales team that their hours, and base pay, will be reduced by 20 percent. While you may have a few members of your sales team that are under performing, you want to retain the entire team.
Write a negative news message in a direct or indirect approach informing your sales team of the news.
Write this document in the form of a memo.
Answer:
To: The Sales Team
From: Henry Cavill, Vice President, Employee Relations
Date: 13 July 2021
Subject: Revisions in Compensation Structure of Sales Department
Dear All,
As you all are going to be knowing, the sales of the corporate have been decreasing since the last 2 quarters. The performance of the half-moon was rock bottom sales achieved by the corporate, within the last 5 years. As a result of this, the corporate and management have decided to require certain strict decisions.
The management has decided to scale back the bottom pay also because of the work hours of the sales team by 20%. This reduction is going to be applicable to all or any levels of the sales division. This decision has been taken in an attempt to form up for the losses, faced by the corporate, thanks to the negative overall performance of the sales team. The new compensation structure is going to be applicable from May 1st, 2019, and can be in practice till the general performance of the sales team bounces back.
In this duration, the corporate also will be observing the performance of the members of the sales team. The compensation of sales employees, who will display extra-ordinary performance, are going to be rewarded by the corporate within the corresponding quarter. Hence, all employees must be motivated to perform their best during this critical time, faced by the corporate.
The management hopes that the workers will understand the company’s perspective during this hard time. We hope things will become better and brighter quite soon. don't hesitate to follow up with me just in case of any doubts or clarifications.
Regards,
Henry Cavill
Vice President, Employee Relations
E-Eyes Bank just issued some new preferred stock. The issue will pay a $9 annual dividend in perpetuity, beginning 6 years from now. If the market requires a 6 percent return on this investment, how much does a share of preferred stock cost today
Answer:
Explanation:
Calculation to determine future sales discounts
Using this formula
Value of Preferred Stock in year 5 =Annual Dividend/Required Rate
Let Plug in the formula
Value of Preferred Stock today =(6/6%)/(1+6%)^5
Value of Preferred Stock today =100/(1+6%)^5
=124.58
During 2011, Simon Kidman, the sole shareholder of a calendar year S corporation, received a distribution of $75,000. On December 31, 2010, his stock basis was $24,000. The corporation earned $50,000 ordinary income during the year. It has no accumulated E & P. Which statement is correct?
a. Kidman's stock basis will be $2,000
b. Kidman's return of capital is $50,000
c. Kidman recognizes a $1,000 LTCG
d. Kidman's ordinary income is $64,000
e. None of the above
Answer: c. Kidman recognizes a $1,000 LTCG
Explanation:
Long term gain can be calculated by the formula:
Capital gain = Distribution received - Basis in stock - Ordinary income earned
= 75,000 - 24,000 - 50,000
= $1,000
Long Term Capital gain is therefore $1,000.
A 3-year bond has an 8.0% coupon rate and a $1,000 face value. If the yield to maturity on the bond is 10%, calculate the price of the bond assuming that the bond makes semiannual coupon payments.
Answer:
$738.68
Explanation:
the price of the bond is $738.68.
A manufacturing company has a beginning finished goods inventory of $28,300, cost of goods manufactured of $58,500, and an ending finished goods inventory of $27,600. The cost of goods sold for this company is
Answer:
the cost of goods sold is $59,200
Explanation:
The computation of the cost of goods sold is shown below:
Cost of goods sold = Beginning finished goods inventory + cost of goods manufactured - ending finished goods inventory
= $28,300 + $58,500 - $27,600
= $59,200
Hence, the cost of goods sold is $59,200
SCI just paid a dividend ( D0 ) of $3.12 per share, and its annual dividend is expected to grow at a constant rate (g) of 6.50% per year. If the required return ( rs ) on SCI’s stock is 16.25%, then the intrinsic value of SCI’s shares is per share. Which of the following statements is true about the constant growth model?
The constant growth model can be used if a stock’s expected constant growth rate is less than its required return.
The constant growth model can be used if a stock’s expected constant growth rate is more than its required return. Use the constant growth model to calculate the appropriate values to complete the following statements about Super Carpeting Inc.:
• If SCI’s stock is in equilibrium, the current expected dividend yield on the stock will be per share.
• SCI’s expected stock price one year from today will be per share.
• If SCI’s stock is in equilibrium, the current expected capital gains yield on SCI’s stock will be .
Answer:
a.
Last Dividend, D0 = $3.12
Growth Rate, g = 6.50%
Required Return, rs = 16.25%
[tex]D1 = D0 \times(1 + g)\\D1 = $3.12\times1.065\\[/tex]
D1 =$ 3.3228
Intrinsic Value, P0 = D1 / (rs - g)
Intrinsic Value, P0 = $3.3228 / (0.1625 - 0.0650)
Intrinsic Value, P0 = $34.08
b.
The constant growth model can be used if a stock’s expected constant growth rate is less than its required return.
c.
Dividend Yield = D1 / P0
Dividend Yield = $3.3228 / $34.08
Dividend Yield = 0.0975 or 9.75%
d.
Price in 1 year, P1 = P0 * (1 + g)
Price in 1 year, P1 = $34.08 * 1.065
Price in 1 year, P1 = $36.30
e.
Capital Gain Yield = (P1 - P0) / P0
Capital Gain Yield = ($36.30 - $34.08) / $34.08
Capital Gain Yield = 0.0650 or 6.50%
1. A certain family has a car loan of $24,623 with a local bank. Because of this loan balance the family would classified as a: demander of loanable funds deficit savings unit deficit budget unit all of the above none of the above
Answer: None of the above
Explanation:
The deficit spending unit is used in describing a scenario when an economy, the household or firm, has spent more than it earned for a particular period of time.
Since the family has a car loan of $24,623 with a local bank, thus means that they spent more than they earned and therefore took loans and are a deficit spending unit.
Since the option isn't given, the correct option is None of the above.
Dragon Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $57,000, and the sales mix is 70% bats and 30% gloves. The unit selling price and the unit variable cost for each product are as follows:
Products Unit Selling Price Unit Variable Cost
Bats $50 $50
Gloves 100 80
a. Compute the break-even sales (units) for both products combined.
b. How many units of each product, baseball bats and baseball gloves, would be sold at break even point?
Answer and Explanation:
The computation is shown below:
Contribution Margin for Bat
= $50 - $50
= $0
Contribution Margin for Gloves = $100 - $80
= $20
Now
Overall Contribution Margin = (0 ×70%) + ($20 × 30%)
= $0 + $6
= $6
Now
A. Break even sales = Fixed cost ÷ contribution margin
= $57,000 ÷ $6
= 9,500
B.Baseball bats = 9,500 × 70% =6,650
Baseball Gloves = 9,500 × 30% = 2,850