Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. on-the-go, inc., produces two models of traveling

On-the-Go, Inc., produces two models of traveling cases for laptop computers: the Programmer and the Executive....

Free

60.1K

Verified Solution

Question

Accounting

On-the-Go, Inc., produces two models of traveling cases forlaptop computers: the Programmer and the Executive. The bags havethe following characteristics: Programmer Executive Selling priceper bag $ 70 $ 100 Variable cost per bag $ 30 $ 50 Expected sales(bags) per year 8,000 12,000 The total fixed costs per year for thecompany are $661,000. Required: a. What is the anticipated level ofprofits for the expected sales volumes? b. Assuming that theproduct mix is the same at the break-even point, compute thebreak-even point. (Round your final answer up to the nearest wholeunit.) c. If the product sales mix were to change to nineProgrammer-style bags for each Executive-style bag, what would bethe new break-even volume for On-the-Go? (Round your final answerup to the nearest whole unit.)

Answer & Explanation Solved by verified expert
4.2 Ratings (686 Votes)

Answer a Anticipated level of profit
Particulars Amount
Sales- Programmer (8000*70) 560000
           - Executives (12000*100) 1200000
Less: Variable cost
         - Programmer (8000*30) 240000
           - Executives (12000*50) 600000
Contribution 920000
Less: Fixed cost 661000
Net expected profit 259000
Answer b Break even sales with same product mix
= Fixed cost/ Weighted average contribution per unit
= 661000/46
14369.56522 or 14370 units total
Weighted Contribution= Weighted Selling price- Weighted variable cost
                                                = (70*2/5+100*3/5)-(30*2/5+50*3/5)
                                                =(28+60)-(12+30)
                                                =46
Answer c Break even sales with same product mix
= Fixed cost/ Weighted average contribution per unit
= 661000/41
16121.95122 or 16122
Weighted Contribution= Weighted Selling price- Weighted variable cost
                                                = (70*9/10+100*1/10)-(30*9/10+50*1/10)
                                                =(63+10)-(27+5)
                                                =41

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Polaski Company manufactures and sells a single product called aRet. Operating at capacity, the...

Accounting
Q

1.) a.In eudicots, stomates are usually found only on the bottom of leaves. In what environment...

Biology
Q

List the 6 different steps in systematic design process and explain each step.

Mechanical Engineering
Q

Given the function f x cos 5 compute the right endpoint Riemann sum using n...

Calculus
Q

represents the cost C of using m anytime cell phone minutes in a month for...

Calculus
Q

Give the center and radius of the circle described by the equation and graph the...

Algebra
Q

Weston Ltd. is considering investing in a new piece of equipment for its factory. It...

Accounting
Q

please answer all parts Annual cash flows from two competing investment opportunities...

Accounting
Q

Siman, is in need of funding to expand their operations and open a flagship showroom....

Accounting
Q

James and Ryann are good friends. They decide to open a sports equipment store together...

Accounting
Q

Chapman Company obtains 100 percent of Abernethy Company's stock on January 1,2023. As of that...

Accounting
Q

Value of an annuity versus a single amount Personal Finance Problem Assume that you just...

Finance