Maurice Tutor

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  • MCS,PHD
    Argosy University/ Phoniex University/
    Nov-2005 - Oct-2011

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  • Professor
    Phoniex University
    Oct-2001 - Nov-2016

Category > Accounting Posted 12 Jul 2017 My Price 9.00

MULTIPLE-PRODUCT BREAK EVEN

Problem  15-47  MULTIPLE-PRODUCT BREAK EVEN

Polaris Inc. manufactures two types of metal stampings for the automobile industry: door handles and trim kits. Fixed costs equal $146,000. Each door handle sells for $12 and has variable costs of $9; each trim kit sells for $8 and has variable costs of $5.

 

Required:

1.     What are the contribution margin per unit and the contribution margin ratio for door handles and for trim kits?

2.     If Polaris sells 20,000 door handles and 40,000 trim kits, what is the operating income?

3.     How many door handles and how many trim kits must be sold for Polaris to break even?

4.     Assume that Polaris has the opportunity to rearrange its plant to produce only trim kits. If this is done, fixed costs will decrease by $35,000, and 70,000 trim kits can be produced and sold. Is this a good idea? Explain.

Answers

Maurice Tutor
(5)
Status NEW Posted 12 Jul 2017 08:07 AM My Price 9.00

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