Question

Ocean City Kite Company manufactures & sells kites for $8.50 each. The variable cost per kite is $3.00

with the current annual sales volume of 50,000 kites. This volume is currently Ocean City Kite’s breaking even point. Use this information to determine the dollar amount of Ocean City Kite Company’s fixed costs. (Round dollar value to the nearest whole dollar & enter as whole dollars only.)

Ocean City Kite Company sells kites for $11.50 per kite. In FY 2019, total fixed costs are expected to be $225,000 and variable costs are estimated at $3.00 a unit. Ocean City Kite Company wants to have a FY 2019 operating income of $80,000. Use this information to determine the number of units of kites that Ocean City Kite Company must sell in FY 2019 to meet this goal. (Round your answer to a whole number)

The following totals are used for CVP Income Statement for Frederick Company for FY2018:

Frederick Company

Selected Financial Figures

For the Year Ended 12/31/18

Sales (100 units)

$10,000

Variable Costs:

     Direct Labor

$1,550

     Direct Materials

2,000

     Factory Overhead (variable)

2,000

     Selling Expenses (variable)

600

     Administrative Expenses (variable)

500

Fixed Costs:

     Factory Overhead (fixed)

$600

     Selling Expenses (fixed)

1,000

     Administrative Expenses (fixed)

1,000

Frederick Company utilizes a JIT production system and there are no Raw Materials, Work-in-Process or Finished Goods inventories. Use this information to determine FY 2018 Contribution Margin Percentage. Enter percentage to one decimal place. (example enter 35.5% as 35.5)

 

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