Reference no: EM133095719
Question 1 - Dike Company makes 3 different shirts. Data concerning the 3 shirts are as follows:
|
Violet
|
Maroon
|
Nude
|
Normal Monthly Sales Volume
|
100,000
|
200,000
|
400,000
|
Selling Price Per Unit
|
$1.65
|
$1.50
|
$0.85
|
Variable Cost Per Unit
|
1.25
|
0.70
|
0.25
|
The total fixed expenses are $400,000 per month. All 3 products are sold in highly competitive markets, so the company is unable to raise its prices without losing unacceptable number of customers. The company has an extremely lean production system, so there is no beginning or ending work in process or finished goods inventories. How much is the company's over-all break-even point?
Question 2 - Corny Corporation is subject to a 30% income tax rate and had the following operating information: Selling price per unit, $60; variable cost per unit, $22; and fixed costs of $504,000. Management plans to improve the quality of its product by replacing a component that costs $3.50 with a higher grade material that costs $5.50 and acquiring a $180,000 packing machine. The company will depreciate the machine over a 10-year life with no estimated salvage value using the straight line method of depreciation. If the company wants to earn an after tax income of $201,600, how many units must be sold under the new proposal?
Question 3 - The standard product mix for making 12,500 tubes of alcohol is:
|
Kilograms
|
Cost Per Unit
|
Total Cost
|
Material A
|
1,500
|
$0.06
|
$90
|
Material B
|
625
|
0.40
|
250
|
Material C
|
1,000
|
0.25
|
250
|
In June, 77,500 tubes were produced from an input of:
|
Kilograms
|
Cost Per Unit
|
Total Cost
|
Material A
|
8,750
|
$0.056
|
$490
|
Material B
|
3,750
|
0.380
|
1,425
|
Material C
|
6,250
|
0.280
|
1,750
|
Calculate the materials yield variance.