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BUS303 Ch3 HWSolution

On-the-Go, Inc. produces two laptop case models: the Programmer and Executive. The Programmer sells for $70 per unit with variable costs of $30 per unit and expected annual sales of 8,000 units. The Executive sells for $100 per unit with variable costs of $40 per unit and expected annual sales of 12,000 units. Total annual fixed costs are $819,000. The company expects to make a $221,000 profit and will break even selling 15,750 units. If sales shift to a 9:1 ratio of Programmer to Executive units, the break-even point is 19,500 units.

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Matt Courchaine
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402 views3 pages

BUS303 Ch3 HWSolution

On-the-Go, Inc. produces two laptop case models: the Programmer and Executive. The Programmer sells for $70 per unit with variable costs of $30 per unit and expected annual sales of 8,000 units. The Executive sells for $100 per unit with variable costs of $40 per unit and expected annual sales of 12,000 units. Total annual fixed costs are $819,000. The company expects to make a $221,000 profit and will break even selling 15,750 units. If sales shift to a 9:1 ratio of Programmer to Executive units, the break-even point is 19,500 units.

Uploaded by

Matt Courchaine
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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3/1/2016

OntheGo,Inc.,producestwomodelsoftravelingcasesforlaptopcomputers:theProgrammerandtheExecutive.Thebagshavethefollowingcharacteri

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OntheGo,Inc.,producestwomodelsoftraveling
casesforlaptopcomputers:theProgrammerand
theExecutive.Thebagshavethefollowing
characteristics:
byAdminonFriday,February21st,2014|NoComments

BSChapter2
BSChapter3
BSChapter4.14.3
BSChapter4.4
BSChapter5.15.2

OntheGo, Inc., produces two models of traveling cases for laptop computers: the Programmer
andtheExecutive.Thebagshavethefollowingcharacteristics:
Programmer

Executive

Sellingpriceperbag

70

100

Variablecostperbag

30

40

Expectedsales(bags)peryear

CATEGORIES

8,000

12,000

BSChapter5.3
BSChapter6.16.2
BSChapter6.3
BSChapter6.4
BSChapter7
BSChapter810,13
BusinessStatistics
CAchapter1

Thetotalfixedcostsperyearforthecompanyare$819,000.

CAChapter16

Required:

CAchapter2

(a)

Whatistheanticipatedlevelofprofitsfortheexpectedsalesvolumes?(Omitthe$signin
yourresponse.)

Profit

CAChapter3
CAchapter4
CAChapter5

CAChapter7

221,0002%

CAChapter6

Assumingthattheproductmixisthesameatthebreakevenpoint,computethebreakeven
(b)
point.

CostAccounting

Breakeven
point

ITChapter1

(c)

15,7502%

units

ITChapter11

IftheproductsalesmixweretochangetonineProgrammerstylebagsforeachExecutivestyle
bag,whatwouldbethenewbreakevenvolumeforOntheGo?

Breakeven
point

19,5002%

IndividualTaxation

ITChapter3
ITChapter4
ITChapter5
ITChapter6

units

ITChapter8

Explanation:

ITChapter9

(a)

ITChapter2
Uncategorized

Programmer + Executive
8,000
$70

12,000
$100

= $ 1,760,000 PX

8,000
$30

12,000
$40

8,000
$40

12,000
$60

720,000

VX

$ 1,040,000 (PV)X
819,000
$ 221,000

F
Profit

(b)
Computetheweightedaveragecontributionmargin.
Weights:
Programmer

(8,000)(8,000+12,000)=
.40

Executive

(12,000)(8,000+12,000)=
.60

http://www.accountinghomeworksolutions.net/costaccounting/onthegoincproducestwomodelsoftravelingcasesforlaptopcomputerstheprogrammer

1/3

3/1/2016

OntheGo,Inc.,producestwomodelsoftravelingcasesforlaptopcomputers:theProgrammerandtheExecutive.Thebagshavethefollowingcharacteri

WeightedaverageCM

= 0.4$40+0.6$60
= $16+$36

WeightedaverageCM

= $52

Computebreakeven:
Profit

= (PV)XF

$0

= $52X$819,000

$52X

= $819,000

= $819,000$52

= 15,750totalunits

Programmer:produce0.415,750=6,300units
Executive:produce0.615,750=9,450units
(c)Newweights:
Weights:
Programmer

.90

Executive

.10

WeightedaverageCM =
=
WeightedaverageCM =

0.9$40+0.1
$60
$36+$6
$42

Computebreakeven:
Profit

(PV)XF

$0

$42X$819,000

$42X

$819,000

$819,000$42

19,500totalunits

Programmer:produce0.919,500=17,550units
Executive:produce0.119,500=1,950units
PostedinCAChapter3,CostAccountingTags:Inc.,OntheGo,producestwomodelsoftravelingcasesforlaptop
computers:theProgrammerandtheExecutive.Thebagshavethefollowingcharacteristics:

ThreeentrepreneurswerelookingtostartanewbrewpubnearSacramento,California,called
RosevilleBrewingCompany(RBC).Brewpubsprovidetwoproductstocustomersfoodfromthe
restaurantsegmentandfreshlybrewedbeerfromthebeerproductionsegment.Bothsegmentsare
typicallyinthesamebuilding,whichallowscustomerstoseethebeerbrewingprocess.
ActionGameshasdevelopedanewcomputergamethatitplanstosellfor$32.Thevariablecosts
associatedwitheachgame(formaterials,shipping,andpackaging)amountto$7.Thefixedcosts
associatedwiththegameamountto$75,000peryear.

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OntheGo,Inc.,producestwomodelsoftravelingcasesforlaptopcomputers:theProgrammerandtheExecutive.Thebagshavethefollowingcharacteri

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