Tweetle - Dee Inc. (Tweetle) began operations this year end sells three models of luxury automatic...
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Tweetle - Dee Inc. (Tweetle) began operations this year end sells three models of luxury automatic bird feeders. Prior to opening day, Tweetle prepared the following budget of unit sales for the first quarter. Model Ducky Duck Unit sales 200 Loony Loon 100 Harry Heron 100 Total 400 Per unit data for each of the products follows: Ducky Duck Loony Loon Selling price Variable Cost $300 90 $250 Harry Heron $400 200 220 Total estimated fixed costs for the first quarter were $44,500. At the end of the first quarter, Tweetle realized the following actual sales units: Model Unit sales Ducky Duck 105 Loony Loon 210 Harry Heron Total 105 420 Actual selling prices for each product's did not differ from estimated. Actual fixed costs did not differ from estimated. Required: 1. Based on the estimated sales data for the quarter: a. Prepare a contribution format income statement b. Compute the break-even point in sales units and sales $ C. Compute the margin of safety in sales units, sales $ and percentage. 2. Based on the actual sales data for the quarter: a. Prepare a contribution format income statement b. Compute the break-even point in sales units and sales $ C. Compute the margin of safety in sales units, sales $ and percentage. After reviewing the information, the owner of Tweetle is shocked at the results and is certain that your calculations must be incorrect. He notes that actual unit sales exceeded projections and it is not possible that operating income is lower than expectations. 3. Explain the results to the owner. Your explanation should consider all information prepared in #1 and #2 above and should be a minimum of one paragraph in length. Tweetle - Dee Inc. (Tweetle) began operations this year end sells three models of luxury automatic bird feeders. Prior to opening day, Tweetle prepared the following budget of unit sales for the first quarter. Model Ducky Duck Unit sales 200 Loony Loon 100 Harry Heron 100 Total 400 Per unit data for each of the products follows: Ducky Duck Loony Loon Selling price Variable Cost $300 90 $250 Harry Heron $400 200 220 Total estimated fixed costs for the first quarter were $44,500. At the end of the first quarter, Tweetle realized the following actual sales units: Model Unit sales Ducky Duck 105 Loony Loon 210 Harry Heron Total 105 420 Actual selling prices for each product's did not differ from estimated. Actual fixed costs did not differ from estimated. Required: 1. Based on the estimated sales data for the quarter: a. Prepare a contribution format income statement b. Compute the break-even point in sales units and sales $ C. Compute the margin of safety in sales units, sales $ and percentage. 2. Based on the actual sales data for the quarter: a. Prepare a contribution format income statement b. Compute the break-even point in sales units and sales $ C. Compute the margin of safety in sales units, sales $ and percentage. After reviewing the information, the owner of Tweetle is shocked at the results and is certain that your calculations must be incorrect. He notes that actual unit sales exceeded projections and it is not possible that operating income is lower than expectations. 3. Explain the results to the owner. Your explanation should consider all information prepared in #1 and #2 above and should be a minimum of one paragraph in length.
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Explanation for TweetleDee Inc Owner The owners surprise regarding the operating income is understandableespecially considering higher than projected ... View the full answer
Related Book For
Fundamental Managerial Accounting Concepts
ISBN: 978-0078025655
7th edition
Authors: Thomas Edmonds, Christopher Edmonds, Bor Yi Tsay, Philip Old
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