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Its accounting please help me​

Its accounting please help me​-example-1
User Rahul Gaur
by
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1 Answer

7 votes

9514 1404 393

Answer:

1a: $84; 1b: 30,000A +15,000B; 1c: 37,000A +18,500B

2: 4,000 composite units

Explanation:

We assume your "composite unit" consists of the smallest set of units in the ratio in which they are sold.

1)

A "composite unit" is 1B +2A. The contribution margins are the difference between the selling price and the variable cost per unit:

A: 72 -40 = 32

B: 48 -28 = 20

composite unit: 2A+B = 2(32) +20 = 84

(a) The contribution margin per composite unit is $84.

__

(b) The break-even point is the number of composite units that have a total contribution margin equal to the total fixed costs:

84n = 1260000

n = 1260000/84 = 15000

30,000 units of A and 15,000 units of B must be sold to break even.

__

(c) The additional number of composite units required to achieve pre-tax income of 294000 is ...

294,000/84 = 3500

37,000 units of A and 18,500 units of B must be sold for a pretax income of $294,000.

__

2)

Contribution margins per unit are ...

H: 6 -4 = 2

C: 8 -6 = 2

I: 10 -7 = 3

A composite unit is 3H +2C +I, so the contribution margin per composite unit is ...

3(2) +2(2) +1(3) = 6 +4 +3 = 13 . . . dollars

The break-even point is 52,000/13 = 4,000 composite units

User Neil McGuigan
by
6.8k points
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