Vandenberg, Inc., produces and sells two products: a ceiling fan and a table fan
ID: 2415775 • Letter: V
Question
Vandenberg, Inc., produces and sells two products: a ceiling fan and a table fan. Vandenberg plans to sell 30,000 ceiling fans and 90,000 table fans in the coming year. Product price and cost information includes:
Common fixed selling and administrative expenses total $80,000.
1. What is the sales mix estimated for next year (calculated to the lowest whole number for each product)?
Sales mix of ceiling fans to table fans = :
2. Using the sales mix from Requirement 1, form a package of ceiling fans and table fans. How many ceiling fans and table fans are sold at break-even? Do not round intermediate calculations. If required, round your final answers to the nearest whole number.
Ceiling Fan Table Fan Price $50 $11 Unit variable cost $11 $4 Direct fixed cost $20,800 $46,000Explanation / Answer
1 Ceiling fans = 30000
table fans = 90000
Total sales 120000
sales mix
Ceiling fans = 30000 /120000
= 25%
Table fans = 90000 /120000
= 75%
2. total break even sale of fans in units
ceiling table
price $50 $11
less: variable cost $11 $4
contribution $39 $7
sales mix 25% 75%
Average contribution margin per unit
$39 *25% $7 *75%
$9.75 $5.25
Total break even sale units = 20800 + 46000 + 80000 / ($9.75 + $5.25)
= $146800 / 15
= 9787 units
Break-even ceiling fans = 9787 * 25%
= 2447 units
Break-even table fans = 9787 *75%
= 7340 units
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