2. Flyer Corporation manufactures two products, Product A and Product B. Product B is of fairly...

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2. Flyer Corporation manufactures two products, Product A and Product B. Product B is of fairly recent origin, having been developed as an attempt to enter a market closely related to that of Product A. Product B is the more complex of the two products, requiring three hours of direct labour time per unit to manufacture compared to one and one-half hours of direct labour time for Product A. Product B is produced on an automated production line. Overhead is currently assigned to the products on the basis of direct labour-hours. The company estimated it would incur a total of $396,000 in manufacturing overhead costs and The company sells its only product for $10 per unit. There was no beginning or ending inventories. Required: a. What are total sales in dollars at the break-even point? b. What are total variable expenses at the break-even point? c. What is the company's contribution margin ratio? d. If unit sales were increased by 10% and fixed expenses were reduced by $2,000, what would be the company's expected net income? (Prepare a new income statement.) 2. Flyer Corporation manufactures two products, Product A and Product B. Product B is of fairly recent origin, having been developed as an attempt to enter a market closely related to that of Product A. Product B is the more complex of the two products, requiring three hours of direct labour time per unit to manufacture compared to one and one-half hours of direct labour time for Product A. Product B is produced on an automated production line. Overhead is currently assigned to the products on the basis of direct labour-hours. The company estimated it would incur a total of $396,000 in manufacturing overhead costs and The company sells its only product for $10 per unit. There was no beginning or ending inventories. Required: a. What are total sales in dollars at the break-even point? b. What are total variable expenses at the break-even point? c. What is the company's contribution margin ratio? d. If unit sales were increased by 10% and fixed expenses were reduced by $2,000, what would be the company's expected net income? (Prepare a new income statement.)

Answer rating: 100% (QA)

a The breakeven point in units can be calculated using the formula Breakeven point in units Fixed Co... View the full answer