Babe Mobile manufactures 3 types of baby strollers Lite, Elite, and Polite The current information on sales and cost structure for the three products are as follows REQUIRED A Calculate the unit contribution margin for each model of stroller B Assuming that the sales mix remains constant, calculate...

Babe Mobile manufactures 3 types of baby strollers: Lite, Elite, and Polite. The current information on sales

Question:

Babe Mobile manufactures 3 types of baby strollers: Lite, Elite, and Polite. The current information on sales and cost structure for the three products are as follows:

$200,000 Revenue (based on sales of 2,000 cases of lobsters) Expenses: $100,000 Wages for fishermen and packers 20,000 P

REQUIRED

A. Calculate the unit contribution margin for each model of stroller.
B. Assuming that the sales mix remains constant, calculate the contribution margin for the composite.
C. What is the break even in units for each model of stroller?
D. If Babe Mobile sets its target income before taxes at $180,000, how many units of each model of stroller should be sold to achieve its target?

Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...

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Question Posted: Apr 30, 2018 08:30 AM

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Babe Mobile manufactures 3 types of baby strollers: Lite, Elite, and Polite. The current information on sales

Question:

$200,000 Revenue (based on sales of 2,000 cases of lobsters) Expenses: $100,000 Wages for fishermen and packers 20,000 Packing materials Rent and insurance 25,000 Administrative and selling 45,000 190,000 Pretax income 10,000 Taxes (20%) 2,000 $ 8,000 After-tax income

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A Cost Fixed Variable Wages 100000 Packing materials 20000 Rent and Insurance 25000 Admin and sellin...View the full answer

Cost Management Measuring, Monitoring and Motivating Performance

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