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Ch_23_Quiz_Supplement

Ch_23_Quiz_Supplement - Purple Popsicles Inc indicated the...

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Carroll Co. has the following costs for the production of basketballs. Variable Costs Per Unit Cost Fixed Costs Cost Direct Materials $6.00 Factory Overhead $40,000 Direct Labor $2.50 Selling and admin expenses $20,000 Factory Overhead $1.50 Selling & admin expenses $2.00 Carroll desires a profit equal to a 20% rate of return on assets, $800,000 of assets are devoted to producing basketballs, and 50,000 units are expected to be produced and sold. Round all percentages to 2 decimal points (example: 0.1574825 = 15.75%) A condensed income statement by product line for
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Unformatted text preview: Purple Popsicles Inc. indicated the following for grape popsicles for the past year: Sales $500,000 Cost of goods sold 300,000 Gross profit 200,000 Operating expenses 250,000 Loss from operations $(50,000) It is estimated that 20% of the cost of goods sold represents fixed factory overhead costs and that 30% of the operating expenses are fixed. Since grape popsicles are only one of many products, the fixed costs will not be materially affected if the product is discontinued....
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