Draw a multi-product break even chart for fitness first co

Assignment Help Managerial Accounting
Reference no: EM132607529

Fitness First Co manufactures three types of fitness equipment: treadmills (T), cross trainers (C) and rowing machines (R). The budgeted sales prices and volumes for the next year are as follows:

                          T                    C                    R

Selling price       RM 1,600      RM 1,800   RM 1,400

Units                  420                   400        380

The standard cost card for each product is shown below.

                               T                 C                   R

                                      RM              RM                 RM

Material                     430             500          360

Labor                         220              240        190

Variable overheads         110              120         95

Labor costs are 60% fixed and 40% variable. General fixed overheads excluding any fixed labor costs are expected to be $55,000 for the next year.


Question 1: Calculate the weighted average contribution to sales ratio for Fitness First Co using the formula of Total Contribution/Total Sales Revenue for the three products.

Question 2: Calculate the margin of safety in RM revenue for Fitness First Co.

Question 3: Using a graph paper and assuming that the products are sold in a CONSTANT MIX, draw a multi-product break even chart for Fitness First Co. Label fully both axes, any lines drawn on the graph and the break even point.

Question 4: Explain what would happen to the break even point if the products were sold in order of the most profitable products first.

Reference no: EM132607529


Write a Review


Managerial Accounting Questions & Answers

  If the company increases production

A manufacturing company produces 80,000 units of product A at a total cost of $2.4 million. Total fixed costs are $1.4 million. If the company increases production by 25% and uses a 19% markup the price per unit will be:A) $31.54B) $30.80C) $51.80D) ..

  What would variable-costing operating income

What would the per-unit inventory cost be under variable costing? Round your answer to the nearest cent. Does this differ from the unit cost computed

  How to compute equivalent units for material and conversion

If Skye Manufacturing uses the weighted average method, Compute the equivalent units for materials and conversion respectively for the Painting Department.

  What are individual adrs for both single and double rooms

Based on information, what are the individual ADRs for both single and double rooms for H hotel for the next year (assume that there are 365 days in a year)?

  Should super fresh make the investment in the new business

Assume that Super Fresh has decided to limit its analysis to seven years. Calculate the net present value of the new business using a 14 percent required rate of return. Should Super Fresh make the investment in the new business?

  Estimating costs based on behavior patterns

Estimating costs based on behavior patterns. The following information provides the amount of cost incurred in August for the cost items indicated. During August, 8,000 units of the firm's single product were manufactured.

  Construct two contribution format income statements

Construct two contribution format income statements, one assuming that operations are not automated and one assuming that they are.

  Journalize all entries - eghan corporation

Journalize all entries required on the above dates, including entries to update depreciation on assets disposed of, where applicable. Eghan Corporation uses straight-line depreciation.

  Being ethical as a business can be costly

Since the board of directors is made up of human beings with selfish tendencies, formation of board of directors irrespective of its configuration

  Prepare income statements for the month of september

Management Accounting - UK college of business and computing - Management Accounting report for Tech (UK) Limited

  What amount of sales revenue that will appear in budget

O'Brien Company has one product and sold, What is the amount of sales revenue that will appear in the budgeted income statement for the first quarter of 2020?

  Determine direct labor rate variance and direct labor time

Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd