Find breakeven and target profit volume
(Learning Objectives 1 & 2)Hang Ten produces sports socks. The company has fixed expenses of$80,000 and variable expenses of $0.80 per package. Each package sells for$1.60.Requirements 1. Compute the contribution margin per package and the contributionmargin ratio. 2. Find the breakeven point in units and in dollars. 3. Find the number of packages that Hang Ten needs to sell to earn a$25,000 operating income. E7-42B Find breakeven and target profitvolume (Learning Objectives 1 & 2)Owner Kay Fay is considering franchising her Noodles Galore restaurantconcept. She believes people will pay $6.25 for a large bowl of noodles.Variable costs are $2.50 a bowl. Fay estimates monthly fixed costs forfranchisees at $8,250.Requirements 1. Find a franchisee’s breakeven sales in dollars. 2. Is franchising a good idea for Fay if franchisees want a minimummonthly operating income of $6,600 and Fay believes most locationscould generate $24,000 in monthly sales? S11-3 Calculate direct material varianceswhen the quantity purchased equals thequantity used (Learning Objective 2)Dolphin Ceramics produces large planters to be used in urban landscapingprojects. A special earth clay is used to make the planters. The standardquantity of clay used for each planter is 24 pounds. Dolphin uses a standardcost of $2.00 per pound of clay. Dolphin produced 3,125 planters in May. Inthat month, 78,125 pounds of clay were purchased and used at the totalcost of $150,000.Requirements 1. Calculate the direct material price variance. 2. Calculate the direct material quantity variance. S11-5 Calculate direct laborvariances (Learning Objective 3)Campa Oil performs oil changes. The standard wage rate for oil changetechnicians is $20 per hour. By analyzing its past records of time spent onoil changes, Casta Oil has developed a standard of 21 minutes (or 0.35hours) per oil change.In July, 800 oil changes were performed at Campa Oil. Oil changetechnicians worked a total of 260 direct labor hours at an average rate of$23 per hour.Requirements 1. Calculate the direct labor rate variance. 2. Calculate the direct labor efficiency variance.
