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Piedmont Fasteners Corporation makes three different clothing fasteners in its manufacturing facility in North Carolina. All three products are sold in highly competitive markets, so the company is unable to raise prices without losing an unacceptable number of customers. Data from the most recent period concerning these products appear below: Velcro Metal Nylon Annual sales volume 103,400 206,800 Unit selling price 413,600 $ 1.65 $ 1.50 $ 0.85 Variable expense per unit $ 1.25 $ 0.70 $ 0.25 Contribution margin per unit $ 0.40 $ 0.80 $ 0.60 Total fixed expenses are $412,000 per period. Of the total fixed expenses. $20,000 could be avoided if the Velcro product is dropped, $80,000 if the Metal product is dropped, and $60,000 if the Nylon product is dropped. The remaining fixed expenses of $252,000 consist of common fixed expenses such as administrative salaries and rent on the factory building that could be avoided only by going out of business entirely. The company's managers would like to compute the break-even point in dollar sales for the company as a whole, and the break-even point in unit sales for each product. They are considering two methods for computing each product's break-even point unlt sales: Method #1 Include each product's traceable fixed costs and an allocated share of the common fixed costs in the numerator of each break-even calculation. The common fixed costs would be allocated to the three products using sales dollars as the allocation base. Method #2. Only include each product's traceable fixed costs in the numerator of each break-even calculation Required: 1. Using data from the most recent period, prepare a contribution format segmented income statement 3a. Calculate the break-even point in unit sales for each product using method 1. 36. If the company sells exactly the break-even quantity of each product, what will be the overall profit for the company using method 4a. Calculate the break-even point in unit sales for each product using method 2 46. If the company sells exactly the break-even quantity of each product, what will be the overall profit for the company using method 2? 5. Which method should the company use to calculate each product's break-even point in unit sales? 12 in sales Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req 3a and 3b Req 4a and 4b Req 5 Using data from the most recent period, prepare a contribution format segmented income statement. Sales Variable expenses Contribution margin Traceable fixed expenses Segment margin Common fixed expenses Net operating Income Piedmont Fasteners Corporation Contribution Format Income Statement Velcro Metal $ 170,610 s 310,200 $ 129,250 144,760 41,360 165,440 20,000 80,000 $ 21,360 S 85,440 $ Nylon 351,560 $ 103.400 248,160 60,000 188,100 Total 832,370 377.410 454,960 160,000 294,960 252.000 42,900 $ Reg 2 > Method #2. Only include each product's traceable fixed costs in the numerator of each break-even calculation. Required: Using data from the most recent period, prepare a contribution format segmented income statement. 2. What is the company's over-all break-even point in dollar sales? 3a. Calculate the break-even point in unit sales for each product using method 1. 3b. If the company sells exactly the break-even quantity of each product, what will be the overall profit for the company using 1? 4a. Calculate the break-even point in unit sales for each product using method 2. 4b. If the company sells exactly the break-even quantity of each product, what will be the overall profit for the company using 2? 5. Which method should the company use to calculate each product's break-even point in unit sales? Complete this question by entering your answers in the tabs below. Reg 5 Req 1 Reg 2 Reg 3a and 3b Reg 4a and What is the company's over-all break-even point in dollar sales? (Round your intermediate calculations to 4 decimal places and final answer to the nearest whole number.) Overall break-even point $ 753,750 break-even calculation. The common fixed costs would be allocated to the three products using sales dollars as the allocation base. Method #2 Only include each product's traceable fixed costs in the numerator of each break-even calculation. Required: 1. Using data from the most recent period, prepare a contribution format segmented income statement 2. What is the company's over-all break-even point in dollar sales? 3a. Calculate the break-even point in unit sales for each product using method 1. 3b. If the company sells exactly the break-even quantity of each product, what will be the overall profit for the company using method 4a. Calculate the break-even point in unit sales for each product using method 2. 4b. If the company sells exactly the break-even quantity of each product, what will be the overall profit for the company using method 22 5. Which method should the company use to calculate each product's break-even point in unit sales? 1? eBook Complete this question by entering your answers in the tabs below. Reg 2 Reg 1 Req ta and 3b Reg 4a and 4b Reg 5 3a. Calculate the break-even point in unit sales for each product using method 1. (Do not round intermediate calculations and final answers to the nearest whole number) 36. If the company sells exactly the break-even quantity of each product what will be the overall profit for the company using method 12 Show less 3a. Velcro's Break-even point in units 3a. Metal's Break-even point in units 3a. Nylon's Break-even point in units 3b. Overall profit (10) break-even calculation. The common fixed costs would be allocated to the three products using sales dollars as the allocation base Method #2. Only include each product's traceable fixed costs in the numerator of each break-even calculation. Required: 1. Using data from the most recent period, prepare a contribution format segmented income statement 2. What is the company's over-all break-even point in dollar sales? 3a. Calculate the break-even point in unit sales for each product using method 1. 3b. If the company sells exactly the break-even quantity of each product , what will be the overall profit for the company using method 4a. Calculate the break-even point in unit sales for each product using method 2. 46. If the company sells exactly the break-even quantity of each product, what will be the overall profit for the company using method 2? 5. Which method should the company use to calculate each product's break-even point in unit sales? 1? Complete this question by entering your answers in the tabs below. Reg 1 Req2 Reg 3a and 3b Req 4a and 46 Reg 5 4a. Calculate the break-even point in unit sales for each product using method 2. 4b. If the company sells exactly the break-even quantity of each product what will be the overall profit for the company using method 27 4a. Velcro's Break-even point in units 4a. Metals Break-even point in nits 4a. Nylon's Break-even point in units 46. Overall profit (oss) 50.000 100,000 100,000 252,000 $ Ras Anand
