18. Carr Company makes 2 products, buckets and shovels. Additional information f
ID: 2456548 • Letter: 1
Question
18. Carr Company makes 2 products, buckets and shovels. Additional information follows:
Buckets
Shovels
Units
1,000
1,500
Sales
$60,000
$25,000
Variable costs
25,200
13,750
Fixed costs
12,000
5,250
Net income
$22,800
$6,000
Pounds of plastic per unit
1.90
0.48
Profit per unit
$22.80
$4.00
Contribution margin per unit
$34.80
$11.25
The company can sell as many buckets and shovels as it can manufacture. How many total units of product will Carr sell at its breakeven point?
Use the information in question 18. Suppose that plastic is in limited supply and only 1,868 pounds are available of plastic. At least 200 of each product must be produced. How many shovels should the company manufacture?
Buckets
Shovels
Units
1,000
1,500
Sales
$60,000
$25,000
Variable costs
25,200
13,750
Fixed costs
12,000
5,250
Net income
$22,800
$6,000
Pounds of plastic per unit
1.90
0.48
Profit per unit
$22.80
$4.00
Contribution margin per unit
$34.80
$11.25
Explanation / Answer
break even sales unit=fixed cost/ contribution per unit
=17250/46.05
=374.59
company manufacture shovels=1868/0.48=3891.666
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