Scott Confectionery sells its Stack-o-Choc candy bar for $0.60. The variable cost per unit for the candy bar is $0.34; total fixed costs are $171,000.a. What is the contribution margin per unit for the Stack -O- Choc candy bar?
b. What is the contribution margin ratio for the Stack -O-Choc candy bar?
C. What is the breakdown point in units? In sales dollars?
D. If an increase in chocalate prices causes the variable cost per unit to increase to $0.55, what will happen to the breakeven point?
Answers
Answer:
(i) $0.26
(ii) 43.33%
(iii) 657,692.31 units
(iv) 3,420,000
Explanation:
Given that,
Selling price = $0.60
Variable cost per unit = $0.34
Total fixed costs = $171,000
(i) contribution margin per unit = Selling price - Variable cost per unit
= $0.60 - $0.34
= $0.26
(ii) contribution margin ratio:
= (contribution margin ÷ Selling price) × 100
= ($0.26 ÷ $0.6) × 100
= 43.33%
(iii) Break-even point in units:
= Total Fixed cost ÷ contribution margin
= (171,000 ÷ 0.26)
= 657,692.31 units
(iv) If an increase in chocolate prices causes the variable cost per unit to increase to $0.55.
contribution margin per unit = Selling price - Variable cost per unit
= $0.60 - $0.55
= $0.05
New Break-even point in units:
= Total Fixed cost ÷ contribution margin
= (171,000 ÷ 0.05)
= 3,420,000 units
Therefore, there is an increase in the break-even units or more units have to be sold to cover the variable and fixed cost.
a. The contribution margin per unit for Stack-O-Choc candy bars is $0.26.
b. The contribution margin ratio is approximately 43.33%.
c. The breakdown point is approximately 657,692 units or $394,615.38 in sales dollars.
d. If the variable cost per unit increases to $0.55, the new breakeven point will be 3,420,000 units, indicating a higher breakeven level.
a. The contribution margin per unit for the Stack-O-Choc candy bar can be calculated as follows:
Contribution Margin per Unit = Selling Price per Unit - Variable Cost per Unit Contribution Margin per Unit = $0.60 - $0.34 = $0.26
b. The contribution margin ratio (CM ratio) is the contribution margin per unit divided by the selling price per unit, expressed as a percentage:
CM Ratio = (Contribution Margin per Unit / Selling Price per Unit) x 100%
CM Ratio = ($0.26 / $0.60) x 100% ≈ 43.33%
c. The breakdown point in units can be calculated using the following formula:
Breakdown Point in Units = Total Fixed Costs / Contribution Margin per Unit Breakdown Point in Units = $171,000 / $0.26 ≈ 657,692 units
To find the breakdown point in sales dollars, you can multiply the breakdown point in units by the selling price per unit:
Breakdown Point in Sales Dollars = Breakdown Point in Units x Selling Price per Unit
Breakdown Point in Sales Dollars = 657,692 units x $0.60 ≈ $394,615.38
d. If the variable cost per unit increases to $0.55 due to higher chocolate prices, you can calculate the new breakeven point using the updated variable cost:
New Breakdown Point in Units = Total Fixed Costs / Updated Contribution Margin per Unit
New Breakdown Point in Units = $171,000 / ($0.60 - $0.55) = $171,000 / $0.05 = 3,420,000 units
So, if the variable cost per unit increases to $0.55, the new breakeven point in units will be 3,420,000 units. This increase in variable cost will result in a higher breakeven point.
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Explanation:
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Answers
Answer:
b. Increase the supply of the good now
Explanation:
Price expectations are one of the determinants of the supply curve. Changes in expectations will make the curve move right or left depending on whether future prices are expected to be lower or higher.
If prices are expected to be lower in the future, that will generate the supply curve to shift right, increasing the quantity supplied. This has to do with producers seeking to sell their goods at the highest price possible. If prices in the present are higher than what they would be in the future then they would want to sell more now than later.
Answers
Answer:
Produce more widgets.
Explanation:
Given the price charge by the competitive firm is = $15
The unit produced = 100
The marginal cost of the last unit = $12
The firm should produce more widget because in the competitive market the firm charge the price that is equal to MC. Moreover, in the given question the price is greater than the marginal cost. Therefore, the firm should produce more widgets in order to reach the condition “P=MC”.
Answers
Answer:
FINANCING LEASE.
trailer 600,000 debit
lease liability 479,825 credit
cash 120,175 credit
--to record Jan 1st entry--
interest expense 38,386 debit
lease liability 81,789 credit
cash 120,175 credit
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Explanation:
The lease is for more than half of the asset useful life. Also, it has a present value equal to the fair value of the trailer. Also, ownership is acquired at the end of the lease life.
To build the schedule we calculate the interest on the principal
then, we subtract that from the installment to get the principal amortization and solve for the remaining at year-end
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Answers
Answer:
A. Customers play important productive roles especially in the creation and delivery of some repeatable services. The roles a customer plays "as a productive resource for the firm" include:
1. The customers act as some partial employees in enhancing the productivity of the firm.
2. The customers contribute to the organization by supplying their valuable time, effort, ideas, and other resources.
3. Without customers playing productive roles, some services cannot be provided to them. Sometimes, the customers actively serve themselves. A typical example is at restaurants and other self-service firms.
4. Customers suggest valuable solutions to resolve some product and service problems.
B. At shopping malls, and even calling for the services of a plumber or electrician,the customer serves in many ways. She pushes the trolley around to pick the goods she requires and afterward, pushes them to the cashier for payment. She helps the plumber or electrician with repair materials or make suggestions on how to solve repair problems.
C. The customer sometimes feel that the plumber or electrician would mess up the repairs without their thoughtful input.
D. Some firms help the customer to perform this role as "a productive resource" when they provide serviceable trolleys for shopping or when they send in some respectful and competent repair people, who dress decently without oozing some offending odor.
Explanation:
It is only some discourteous firms that do not recognize that their customers play an important role as a productive resource. For some service organizations, their services cannot be consummated without the active participation of the customer. It is, therefore, imperative that firms help their customers to perform this role effectively and efficiently.
Final answer:
The customer can act as a productive resource for a firm through co-creation of value. This involves a customer actively participating through offering ideas, suggestions, and feedback, or even taking part in the production process. An example is participating in a customer survey for a restaurant, where the feedback provided helps shape the restaurant’s services and offerings.
Explanation:
In the context of a business, a customer can also act as a productive resource. This is often referred to as co-creation of value. It means that a customer could directly or indirectly be involved in the production process of the goods or services that they consume. This involvement could come in the form of ideas, suggestions, feedbacks, or active participation in the production process.
For instance, let’s say I once participated in a customer survey for a restaurant where I frequently dine. My feedback about their menu, services, and ambience shaped their decision-making process to some extent. This made me feel valued and part of the restaurant's growth and improvement, which is a positive feeling. The restaurant helped me to perform my role effectively by encouraging feedback, implementing suggestions, and communicating subsequent changes. This reciprocal relationship benefited both me as a customer and the restaurant as a business.
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Answers
Answer: $150
Explanation:
Transportation/ Freight charges as well as the credit memo are not to be included when calculating the discount so;
= 27,000 - 2,000 - 10,000
= $15,000
Terms of 1/10 n/30 means that the sale is subject to a 1% discount if it is paid for in 10 days.
The discount therefore is;
= 15,000 * 1%
= $150