Chapter 4b Solutions to Cornerstone Exerceises

Chapter 4b Solutions to Cornerstone Exerceises - CHAPTER 4B...

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CHAPTER 4B CORNERSTONE EXERCISES Cornerstone Exercise 4–19 1. Any package with 5 bicycle helmets for every 1 motorcycle helmet is fine. For example, 5:1, or 10:2, or 30:6. Throughout the rest of this exercise, we will use 5:1. Unit Unit Package Unit Variable Contribution Sales Contribution Product Price Cost Margin Mix Margin Bicycle helmet $ 70 $ 49 $21 5 $105 Motorcycle helmet 220 143 77 1 77 Package total $182 2. Break-even packages = margin on contributi Package cost Fixed = $182 $54,600 = 300 packages Break-even bicycle helmets = Number of packages × Sales mix amount = 300 × 5 = 1,500 Break-even motorcycle helmets = Number of packages × Sales mix amount = 300 × 1 = 300 3. Head-First Company Contribution Margin Income Statement At Break-Even Total Sales [($70 × 1,500) + ($220 × 300)]. ......................................... $171,000 Total variable expense [($49 × 1,500) + ($143 × 300)]. ............. 116,400 Total contribution margin. ........................................................ $ 54,600
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This note was uploaded on 10/20/2011 for the course ACC 222 taught by Professor Brewer during the Spring '08 term at Miami University.

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Chapter 4b Solutions to Cornerstone Exerceises - CHAPTER 4B...

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