e l STInet C ezto.rmheducation.com/tim..tpx è overview Cengage Cengage ey D Chap

Question

e l STInet C ezto.rmheducation.com/tim..tpx è overview Cengage Cengage ey D Chapter 6, Assignment 2 ×encengage learning. ' _and-Introd D Homel STInet cengage M McGraw-Hil Connec a New Tab Search w woridayecos PAS-6 Multiproduct CVP, Analyzing Breakeven Point, Target Profit, Degree of Operating Leverage lL6-5,661 Pin Cushion Company produces two models of sewing basket. Information about Pin Cushion's products is given below Product A $41,000 16 600 Product B $56,000 Sales revenue Less: Variable costs Contribution margin Total units sold 040 2,080 Pin Cushion's fixed costs total $39,100 Required: 1. Determine Pin Cushion's weighted-average unt contnbution places (Le, .1234 should be entered as 1234% weighted margin and weighted average contnbution margin rato (Round your CM per unit and weighted aive Weighted-Average Unit CM Weighted-Average CM Ratio 2. Calculate Pin Cushion's break-even units and break- even saies revenue (Round your units to the nearest whole number and saies Units Break-Even Sales Units Broak Even Sales Revenue here to sea

Explanation / Answer

Req 1 INCOME STATEMENT PRODUCT A PRODUCT B TOTAL Sales revenue 41000 56000 97000 Less: variable cost 16600 25000 41600 Contribution margin 24400 31000 55400 Less: Fixed cost 39100 Net Operating income 16300 Sales Mix: 1:2 Weighted CM per unit: Total contribution / Total units sold = 55400/(1040+2080) = $ 17.76 per unit Weighted CM ratio: Total contribution/ Total sales *100 = $ 55400/97000 *100 = 57.11% Req 2: Break even Units : Fixed cost / Weighted Average CM per unit $ 39100 / $ 17.76 per unit = 2202 units Break even sales in $: Fixed cost / Weighted CM ratio = 39100 /57.11% = $ 68,465 Req 3: Product A (2202 /3) 734 Units Product B (2202*2/3) 1468 Units Req 4: Target sales in $ : Desired contribution/ Weighte CM ratio = $ (39100+65800) / 57.11% = $ 183,681 Req 5: Sales revenue for shall be in proportion to original mix i.e. 41000 :56000 Sales revenue of each product: Product A (183681*41000/97000): $77,638 Product B (183681*56000/97000): $106,043 Req 6: Degree of Operating leverage: Total contribution/ Total profits $ 55400/16300 = 3.40

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.