Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Assume Annie's Homemade divides its total annual sales of $650,000 into two sales channeis: in-store sales and mobile saies. The instore sales comprise 65% of

image text in transcribed
image text in transcribed
Assume Annie's Homemade divides its total annual sales of $650,000 into two sales channeis: in-store sales and mobile saies. The instore sales comprise 65% of total sales and the mobile sales account for 35% of total sales. The variable expense ratio is 30% for instore sales and 40% for mobile sales. Variable expenses are a higher percentage of sales in the mobile sales segment because of various factors, such as price discounts offered to high-volume customers, packaging costs, and incremental fuel costs, Of the company's total annual fixed expenses of $240,000,$10,000 is traceable to in-store sales, $15,000 is traceable to mobile sales, and the remainder are common fixed expenses. The common fixed expenses - the three largest of which include employee salaries (\$120,000), equipment depreciation ($40,000), and store rent ($36,000)-would be avoidable only if the company went out of business. Required: 1. Prepare a contribution format segmented income statement that divides Annie's Homemade's total sales into two sales channels: in-store sales and mobile sales. 2. For the mobile sales segment: a. What is the break-even point in dollar sales? b. Assuming an average selling price of $4.50 per serving, what is the break-even point in number of servings (round your answer up to the nearest whole number)? 3. For the in-store segment a. What is the break-even point in doliar sales (rounded to the nearest dollan)? b. If the in-store segment's unit sales grow by 5% and all else holds constant, then whot would be the impact on profitskrounded to the nearest dollar)? Complete this question by entering your answers in the tabs below. If the in-store segment's unit sales grow by 5% and all else holds constant, then what would be the impact on profits (rounded to the nearest dollar)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

An Introduction To Modern Financial Reporting Theory

Authors: Brian A Rutherford

1st Edition

9780761966074

More Books

Students also viewed these Accounting questions

Question

1. Pupils can be trusted to work together without supervision.

Answered: 1 week ago

Question

a. Did you express your anger verbally? Physically?

Answered: 1 week ago