Angus Manufacturing makes basic tools for sale in hardware stores across the country. It is a successful business, with the following unit sales in a month. It faces fixed costs of $225,000 per month. Angus wants you to help him understand how his product mix affects his business.

REQUIRED:

a. What is Angus’s product mix? Base this on Phillips-head screwdrivers.

b. What is Angus’s package contribution margin?

c. Perform a multiproduct breakeven for Angus Manufacturing. How many of each type of product does he need to sell in order to break even?

d. What is Angus’s current profit for the business?

e. What is Angus’s current margin of safety in terms of revenue dollars?

f. Angus wants to make $100,000 per month before taxes. How many units of each type of product does the company need to sell now? What is its required revenue dollars of sales?

g. Angus wants this profit in after-tax dollars. He pays a 20% tax rate. How many units of each type of product does the company need to sell now? What are its required revenue dollars of sales?

Transcribed Image Text:

Angus Manufacturing Price per Variable Cost Product Unit per Unit Units Sold Hammers $10 $7.50 25,000 Socket wrenches $25 $15.00 10,000 Plain screwdriver $8 $6.40 10,000 Phillips-head screwdriver $8 $6.40 5,000 Pliers $10 $7.50 25,000