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X Company produces a single product- It has the following estimates fo.docx

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X Company produces a single product- It has the following estimates fo.docx

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X Company produces a single product. It has the following estimates for next year:
The company does not have a reliable estimate of fixed overhead. What must fixed overhead be in order for the company to earn $15,000?
Please explain how you go the answer. Thank you!
Solution
1 Contribution margin rate (Revenue * Contribution Margin rate)                                                                                                                         198,000 2 Fixed selling and administration $                                                                                                                            86,000 3 Target Profit $                                                                                                                            15,000 4 Fixed Overheads $ (1-2-3)                                                                                                                      97,000
.

X Company produces a single product. It has the following estimates for next year:
The company does not have a reliable estimate of fixed overhead. What must fixed overhead be in order for the company to earn $15,000?
Please explain how you go the answer. Thank you!
Solution
1 Contribution margin rate (Revenue * Contribution Margin rate)                                                                                                                         198,000 2 Fixed selling and administration $                                                                                                                            86,000 3 Target Profit $                                                                                                                            15,000 4 Fixed Overheads $ (1-2-3)                                                                                                                      97,000
.

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X Company produces a single product- It has the following estimates fo.docx

  1. 1. X Company produces a single product. It has the following estimates for next year: The company does not have a reliable estimate of fixed overhead. What must fixed overhead be in order for the company to earn $15,000? Please explain how you go the answer. Thank you! Contribution margin rate 36% Revenue $550,000 Fixed selling and administration $86,000 Solution 1 Contribution margin rate (Revenue * Contribution Margin rate) Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 198,000 2 Fixed selling and administration $ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 86,000 3 Target Profit $ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 15,000 4 Fixed Overheads $ (1-2-3) Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 97,000

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