16.5

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:

	Ceiling Fan				Table Fan
Price		$50				$11
Unit variable cost		$11				$4
Direct fixed cost		$20,800				$46,000

Common fixed selling and administrative expenses total $80,000.

Ceiling Fans Table Fans Total

Sales

Less: variable expenses

Contribution margin

Less: direct fixed expenses

Product Margin

Less: Common fixed expenses

Operationg income

4. What if Vandenberg, Inc., wanted to earn operating income equal to $14,400? Calculate the number of ceiling fans and table fans that must be sold to earn this level of operating income. (Hint: Remember to form a package of ceiling fans and table fans based on the sales mix and to first calculate the number of packages to earn an operating income of $14,400.) Round your intermediate calculations and final answers to nearest number.

Break-even ceiling fans
Break-even table fans