Reference no: EM132440889

Question -

Q1. Ocean City Kite Company manufactures & sells kites for $6.50 each. The variable cost per kite is $3.50 with the current annual sales volume of 95,000 kites. This volume is currently Ocean City Kite's breaking even point. Use this information to determine the dollar amount of Ocean City Kite Company's fixed costs.

Q2. Ocean City Kite Company sells kites for $9.00 per kite. In FY 2019, total fixed costs are expected to be $175,000 and variable costs are estimated at $4.00 a unit. Ocean City Kite Company wants to have a FY 2019 operating income of $70,000. Use this information to determine the number of units of kites that Ocean City Kite Company must sell in FY 2019 to meet this goal.

The following totals are used to create CVP Income Statement for Frederick Company for FY2018:

Frederick Company Selected Financial Figures For the Year Ended 12/31/18

Sales (100 units) $10,000

Variable Costs:

Direct Labor $1,050

Direct Materials 1,500

Factory Overhead (variable) 2,000

Selling Expenses (variable) 600

Administrative Expenses (variable) 500

Fixed Costs:

Factory Overhead (fixed) $800

Selling Expenses (fixed) 1,000

Administrative Expenses (fixed) 1,000

Frederick Company utilizes a JIT production system and there are no Raw Materials, Work-in-Process or Finished Goods inventories. Use this information to determine FY 2018 Contribution Margin Percentage.