Answer: $222,800
Explanation:
Given that,
Sales = $427,000
Cost of goods sold (all variable) = $173,400
Total variable selling expense = $21,200
Total fixed selling expense = $18,900
Total variable administrative expense = $9,600
Total fixed administrative expense = $36,300
Variable expenses:
= Cost of goods sold + Variable selling expense + Variable administrative expense
= $173,400 + $21,200 + $9,600
= $204,200
Contribution margin = Sales - Variable expenses
= $427,000 - $204,200
= $222,800
Answer:
Break even point in dollar sales = $1,050,000
Explanation:
Break Even Point in dollar sales = Fixed Cost/ Contribution margin percentage
Contribution margin percentage = (Contribution margin/ Sales) X 100
Here we have for the year 2017
Contribution margin = $194,750
Sales = $779,000
Contribution margin percentage = ($194,750/$779,000) X 100 = 25%
Break even point in dollar sales = Fixed Cost $262,500/25%
= $1,050,000
They benefit producers and hurt consumers
Answer:
Shawna needs to consult with a financial advisor to make sure she has not missed any details.
Here, we are decide the best option between making the part or buying the part.
a. Make or Buy Analysis
Particulars Make amount Buy amount
Direct Materials $4.50
Direct Labor $1.00
Overhead (80% of Direct Labor) $0.80
Cost to buy <u> </u> <u>$4.70</u>
Cost per unit <u>$5.70 </u> <u>$4.70</u>
Cost Difference = $5.70 - $4.70
Cost Difference = $1.00
Therefore, the cost difference of making amount over buying amount is $1.00.
b. Because of the difference, Beto should buy the part because its cost is lesser than to make the part.
Therefore, the buying of the part is the best decision.
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