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Break - Even Point and Target Profit Measured in Sales Dollars ( Multiple Products ) . Wool Works, Inc., produces two different products with the

Break-Even Point and Target Profit Measured in Sales Dollars (Multiple Products). Wool Works, Inc., produces two different products with the following monthly data (these data are the same as the previous exercise): Break-Even Point and Target Profit Measured in Sales Dollars (Multiple Products). Wool
Works, Inc., produces two different products with the following monthly data (these data are the
same as the previous exercise):
Assume the sales mix remains the same at all levels of sales.
Required:
Round your answers to the nearest hundredth of a percent and nearest dollar where appropriate.
(An example for percentage calculations is 0.434532=0.4345=43.45 percent; an example for
dollar calculations is $378.9787=$379.)
a. Using the information provided, prepare a contribution margin income statement for the month
similar to the one in Table 6.1.
b. Calculate the weighted average contribution margin ratio.
c. Find the break-even point in sales dollars.
d. What amount of sales dollars is required to earn a monthly profit of $780,000?
e. Assume the contribution margin income statement prepared in requirement a is the company's
base case. What is the margin of safety in sales dollars?
Sweater Jacket Total
Selling price per unit $100 $400
Variable cost per unit $ 40 $240
Expected unit sales 21,0009,00030,000
Sales mix 70 percent 30 percent 100 percent
Fixed costs $2,070,000
Assume the sales mix remains the same at all levels of sales.
Required:
Round your answers to the nearest hundredth of a percent and nearest dollar where appropriate. (An example for percentage calculations is 0.434532=0.4345=43.45 percent; an example for dollar calculations is $378.9787= $379.)
Using the information provided, prepare a contribution margin income statement for the month similar to the one in Table 6.1.
Calculate the weighted average contribution margin ratio.
Find the break-even point in sales dollars.
What amount of sales dollars is required to earn a monthly profit of $780,000?
Assume the contribution margin income statement prepared in requirement a is the companys base case. What is the margin of safety in sales dollars?
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