Pineapple Corp

question 8

Essay

Pineapple Corp.has annual revenues of $600,000, fixed expenses of $200,000, and an average contribution margin ratio of 30%.
(a)Management is considering adding a new product to the company's product line.The new item will have $14.00 of variable costs per unit.Calculate the selling price that will be required for this product to maintain the 30% average contribution margin ratio on current sales.
(b)If the new product adds an additional $63,000 to Pineapple's fixed expenses, how many units of the new product must be sold at the price calculated in part (a)in order to break even on the new product?
(c)If 25,000 units of the new product could be sold at a price of $18.00 per unit, and the company's other business did not change, calculate Pineapple's total operating income and average contribution margin ratio.

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Definitions:

Query Display

A method or feature in software for showing the results of a database query or search.

Create A Report

The process of gathering data and organizing it into a structured document, often for the purpose of analysis or communication of findings.

Navigation Pane

A component of user interfaces in applications that allows users to navigate through different sections or features.

Shortcut Menu

A context-sensitive menu that appears when a user right-clicks on an element in an interface, offering quick access to common actions.