Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. product pricing: single product presented is the 2

Product Pricing: Single Product Presented is the 2014 contribution income statement of Colgate Products. COLGATE PRODUCTS Contribution Income Statement For...

70.2K

Verified Solution

Question

Accounting

Product Pricing: Single Product
Presented is the 2014 contribution income statement of ColgateProducts.

COLGATE PRODUCTS
Contribution Income Statement
For Year Ended December 31, 2014
Sales (13,000 units)$ 1,560,000
Less variable costs
Cost of goods sold$ 520,000
Selling and administrative143,000(663,000)
Contribution margin897,000
Less fixed costs
Manufacturing overhead520,000
Selling and administrative210,000(730,000)
Net income$ 167,000


During the coming year, Colgate expects an increase in variablemanufacturing costs of $8 per unit and in fixed manufacturing costsof $35,000.

(a) If sales for 2015 remain at 13,000 units, what price shouldColgate charge to obtain the same profit as last year? Round to thenearest cent.
$Answer

(b) Management believes that sales can be increased to 16,000 unitsif the selling price is lowered to $107. What would be the exceptedprofit (or loss) as a result of this action? Use a negative signwith your answer, if appropriate.
Answer

(c) After considering the expected increases in costs, what salesvolume is needed to earn a profit of $167,000 with a unit sellingprice of $107? Round to the nearest uni

Answer & Explanation Solved by verified expert
4.2 Ratings (494 Votes)
Variable manufacturing cost per unit in 2014 52000013000 40 Variable selling and administrative cost per unit in 2014 14300013000 11 During 2015 Colgate expects an increase in variable manufacturing costs of 8 per unit and in fixed manufacturing costs    See Answer
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

Select 5 international clothing brands and make a swot analysis.word count should be 4000 words.please don't...

Operations Management
Q

Name some of the metallic and non-metallic materials used in pump construction,against the following applications 1) Hazardous...

Mechanical Engineering
Q

Problem: When alpha-iron is subjected to an atmosphere of hydrogen gas, the concentration of hydrogen in...

Mechanical Engineering
Q

Carlo and Anita make mailboxes and toys in their craft shop near Lincoln. Each mailbox requires...

Advance Math
Q

1 During your assessment process what is one thing you can do to increase the...

Biology
Q

Determine the mean and standard deviation of the variable X in each of the following...

Statistics
Q

K Use the value of the linear correlation coefficient to calculate the coefficient of determination...

Statistics
Q

Ex 2 The weight of captive adult female lowland gorillas is normally distributed with a...

Statistics
Q

28 Macmillan Learning a Suppose a researcher runs a t test of the difference of...

Calculus
Q

Question 7 Calculate the correlation coefficient of the following table using a spread Increase in...

Algebra
Q

Blinko Products is considering elating an airplane for use by its sales staff. I fate...

Accounting
Q

National Business Machine Co. (NBM) has $3 million of extra cash after taxes have been...

Finance