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Question - A alexis company produces and markets two types of electronic devices. The following data were gathered on activities during the third quarter:
Model A
Model B
Sales in units
5,000
3,000
Sales price per unit
$100
$200
Variable production costs per unit
$20
$40
Traceable fixed production costs
$200,000
$300,000
Variable selling expenses per unit
$10
$12
Traceable fixed selling expenses
$10,000
$15,000
The company has common expenses of $236,000. Complete a segmented income statement for last quarter. The statement should provide sufficient detail to allow the company to evaluate the performance of the manager of each product line. Add or delete rows as needed.
The probability distribution and the returns, What should be the decision of the manager (Increasing price or reducing price) based on expected values?
Calculate the break-even point in dollars using the contribution margin ratio. For the coming year, management expects fixed costs to total $200,000.
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