5.

Multiple-Product Break-Even and Target Profit

Vandenberg, Inc., produces and sells two products: a ceiling fan and a table fan. Vandenberg plans to sell 40,000 ceiling fans and 70,000 table fans in the coming year. Product price and cost information includes:

	Ceiling Fan				Table Fan
Price		$50				$16
Unit variable cost		$15				$7
Direct fixed cost		$21,200				$46,000

Common fixed selling and administrative expenses total $74,000.

Required:

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? Round your intermediate calculations and final answers to the nearest whole number.

Break-even ceiling fans	fill in the blank 8bb67b08c02aff3_3
Break-even table fans	fill in the blank 8bb67b08c02aff3_4

3. Prepare a contribution-margin-based income statement for Vandenberg, Inc., based on the unit sales calculated in Requirement 2. If an amount is zero, enter "0". Enter any negative product margin and losses with a minus sign. Do not round intermediate calculations. Round your final answers to nearest dollar.

Vandenberg, Inc.
Contribution-Margin-Income Statement
For the Coming Year
	Ceiling Fans	Table Fans	Total
	$fill in the blank 01cb6aff8012079_2	$fill in the blank 01cb6aff8012079_3	$fill in the blank 01cb6aff8012079_4
	fill in the blank 01cb6aff8012079_6	fill in the blank 01cb6aff8012079_7	fill in the blank 01cb6aff8012079_8
	$fill in the blank 01cb6aff8012079_10	$fill in the blank 01cb6aff8012079_11	$fill in the blank 01cb6aff8012079_12
	fill in the blank 01cb6aff8012079_14	fill in the blank 01cb6aff8012079_15	fill in the blank 01cb6aff8012079_16
	$fill in the blank 01cb6aff8012079_18	$fill in the blank 01cb6aff8012079_19	$fill in the blank 01cb6aff8012079_20
			fill in the blank 01cb6aff8012079_22
			$fill in the blank 01cb6aff8012079_24

4. What if Vandenberg, Inc., wanted to earn operating income equal to $12,400? 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 $12,400.) Round your intermediate calculations and final answers to nearest number.

Break-even ceiling fans	fill in the blank 06cf8d01e06606a_1
Break-even table fans	fill in the blank 06cf8d01e06606a_2