Question: Help with Question A to E CVP single product; comprehensive Beantown Baseball Company makes baseballs that sell for $13 per two-pack. Current annual production and
Help with Question A to E
CVP single product; comprehensive Beantown Baseball Company makes baseballs that sell for $13 per two-pack. Current annual production and sales are 576,000 baseballs. Costs for each baseball are as follows:
| Direct material | $2.00 |
| Direct labor | 1.25 |
| Variable overhead | 0.50 |
| Variable selling expenses | 0.25 |
| Total variable cost | $4.00 |
| Total fixed overhead | $750,000 |
a. Calculate the unit contribution margin in dollars and the contribution margin ratio for the company. Note: Round percentage to two decimal places (for example, round 32.5555% to 32.56%). Unit contribution margin in dollars $Answer
Contribution margin ratio Answer
% b. Determine the break-even point in number of baseballs. Answer
c. Calculate the dollar break-even point using the contribution margin ratio. Note: Round amount to the nearest whole dollar. $Answer
d. Determine the companys margin of safety in number of baseballs, in sales dollars, and as a percentage. Note: Round margin of safety percentage to two decimal places (for example, round 32.555% to 32.56%). Margin of safety in baseballs: Answer
Margin of safety in dollars: $Answer
Margin of safety percentage: Answer
% e. (1) Compute the companys degree of operating leverage. Note: Round amount to two decimal places (for example, round 32.555 to 32.56). Degree of operating leverage Answer
(2) If sales increase by 30 percent, by what percentage would pre-tax income increase? Note: Round to the nearest whole percentage point (for example, round 24.5% to 25%). Percentage increase in pre-tax income Answer
%
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