Cleboard luetooth Font G D H A B 1 Break-Even Point and Target Profit Measured in Units (Multiple Products) 2 Hi-Tech Incorporated produces two different products with the following monthly data 3 4 Cell GPS Total 100 400 5 Selling price per unit 6 Variable cost per unit 40 240 7 Expected unit sales 21,000 9,000 30,000 8 Sales mix% 70% 30% 100% 9 Fixed costs 1,800,000 10 11 Assume the sales mix remains the same at all levels of sales 12 13 Required: 14 1 Calculate the weighted average contribution margin per unit 15 2 How many units in total must be sold to break even? 16 3 How many units of each product must be sold to break even? 17 4 How many units in total must be sold to earn a monthly profit of $180,000? 18 5. How many units of each product must be sold to earn a monthly profit of $180,000? 6 Using the information provided, prepare a contribution margin income statement for 19 the month 20 7 Calculate the weighted average contribution margin ratio 21 8 Find the break-even point in sales dollars 22 9 How much sales dollars of each product to break-even? 23 10 What amount of sales dollars is required to earn a monthly profit of $540,000? 24 11 How much sales dollars of each product to earn a montly profit of $540,000?? 12 Assume the contribution margin income statement prepared in requirement 6 is the 25 company's base case. What is the Margin of Safety in dollars? 26 27 Cell GPS Total 28 Sales 100 400 500 29 Less: Variable 40 240 280 30 Contribution Margin 60 160 220 31 Sales Mix 70.00 30.0% 32 Weighted Average Contributon Margin: 33 1 90 34 7 Weighted Average CM Ratio 1.0% 35 36 Break-even point in units = Total fixed costs +Target profit 37 Break-even point in units 7 Weighted average contribution marg 1.800.000 38 90 Break-even point in units 1,800,000 / 90 39 2 Break-even point in units 20,000 3 BE Units per Product 14,000 6,000 6.27 28 29 16.10.3163 6.36 376.57 Extra Credit 40 Read Search Chipboard GBurtooth Font Alignment B D E F G H D 3 BE Units per Product 14,000 1 2 Target Profit in Units = Total fixed costs +Target profit 7 Weighted average contributie 3 Target Profit in Units 1,000,000 + 180,000/ DO 4 Target Profit in Units 1.980,000/ 90 5 4 Target Profit in Units 22.000 6 5 Target Profit Units per product 15,400 6,600 7 8 Cell GPS Total 9 6 Sales 2.100.000 3,600,000 5,700,000 0 Less: Variable 840,000 2.100.000 3,000,000 1 Contribution Margin 1.260,000 1,440,000 2,700,000 2 Less Fixed Costs 1,800,000 3 Operating Income 900,000 5 Break-even point in Dollars - Total fixed costs + Target profit / Weighted average contribution 6 Break-even point in Dollars 1,800,000 70% Break-even point in Dollars 1,800,000 30% 8 8 Break-even point in Dollars 1,800,000 9 9 BE dollars per product 1,800,000 1,800,000 0 -1 Target Profit in Dollars = Total fixed costs + Target profit / Weighted average contribution 2 Target Profit in Dollars 1,800,000 $40,000 3 Target Profit in Dollars 2,340,000 54 10 Target Profit in Dollars 55 11 Target Profit Dollars per product 702,000 702,000 16 7 Margin of Safety Dollars 8 Margin of safety in Dollars = Total Sales (or Projected Sales) -- Breakeven Sales 59 MOSS BES 70 MOSS 1 MOSS 72 73 34 35 36 77 78 79 80 6.27 28 29 0.35 6.16 36.57 Extra Credit Cleboard luetooth Font G D H A B 1 Break-Even Point and Target Profit Measured in Units (Multiple Products) 2 Hi-Tech Incorporated produces two different products with the following monthly data 3 4 Cell GPS Total 100 400 5 Selling price per unit 6 Variable cost per unit 40 240 7 Expected unit sales 21,000 9,000 30,000 8 Sales mix% 70% 30% 100% 9 Fixed costs 1,800,000 10 11 Assume the sales mix remains the same at all levels of sales 12 13 Required: 14 1 Calculate the weighted average contribution margin per unit 15 2 How many units in total must be sold to break even? 16 3 How many units of each product must be sold to break even? 17 4 How many units in total must be sold to earn a monthly profit of $180,000? 18 5. How many units of each product must be sold to earn a monthly profit of $180,000? 6 Using the information provided, prepare a contribution margin income statement for 19 the month 20 7 Calculate the weighted average contribution margin ratio 21 8 Find the break-even point in sales dollars 22 9 How much sales dollars of each product to break-even? 23 10 What amount of sales dollars is required to earn a monthly profit of $540,000? 24 11 How much sales dollars of each product to earn a montly profit of $540,000?? 12 Assume the contribution margin income statement prepared in requirement 6 is the 25 company's base case. What is the Margin of Safety in dollars? 26 27 Cell GPS Total 28 Sales 100 400 500 29 Less: Variable 40 240 280 30 Contribution Margin 60 160 220 31 Sales Mix 70.00 30.0% 32 Weighted Average Contributon Margin: 33 1 90 34 7 Weighted Average CM Ratio 1.0% 35 36 Break-even point in units = Total fixed costs +Target profit 37 Break-even point in units 7 Weighted average contribution marg 1.800.000 38 90 Break-even point in units 1,800,000 / 90 39 2 Break-even point in units 20,000 3 BE Units per Product 14,000 6,000 6.27 28 29 16.10.3163 6.36 376.57 Extra Credit 40 Read Search Chipboard GBurtooth Font Alignment B D E F G H D 3 BE Units per Product 14,000 1 2 Target Profit in Units = Total fixed costs +Target profit 7 Weighted average contributie 3 Target Profit in Units 1,000,000 + 180,000/ DO 4 Target Profit in Units 1.980,000/ 90 5 4 Target Profit in Units 22.000 6 5 Target Profit Units per product 15,400 6,600 7 8 Cell GPS Total 9 6 Sales 2.100.000 3,600,000 5,700,000 0 Less: Variable 840,000 2.100.000 3,000,000 1 Contribution Margin 1.260,000 1,440,000 2,700,000 2 Less Fixed Costs 1,800,000 3 Operating Income 900,000 5 Break-even point in Dollars - Total fixed costs + Target profit / Weighted average contribution 6 Break-even point in Dollars 1,800,000 70% Break-even point in Dollars 1,800,000 30% 8 8 Break-even point in Dollars 1,800,000 9 9 BE dollars per product 1,800,000 1,800,000 0 -1 Target Profit in Dollars = Total fixed costs + Target profit / Weighted average contribution 2 Target Profit in Dollars 1,800,000 $40,000 3 Target Profit in Dollars 2,340,000 54 10 Target Profit in Dollars 55 11 Target Profit Dollars per product 702,000 702,000 16 7 Margin of Safety Dollars 8 Margin of safety in Dollars = Total Sales (or Projected Sales) -- Breakeven Sales 59 MOSS BES 70 MOSS 1 MOSS 72 73 34 35 36 77 78 79 80 6.27 28 29 0.35 6.16 36.57 Extra Credit