Clipboard E Font 79 X fx F G B C D E Break-Even Point and Target Profit Measured in Units (Multiple Products) Hi-Tech Incorporated produces two different products with the following monthly data 30% Cell GPS Total Selling price per unit 100 400 Variable cost per unit 40 240 Expected unit sales 21,000 9,000 30,000 Sales mix % 70% 100% Fixed costs 1,800,000 0 1 Assume the sales mix remains the same at all levels of sales 2 3 Rec 4 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 the 19 month 20 7 Calculate the weighted average contribution margin ratio 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? 11 How much sales dollars of each product to earn a montly profit of $540,000?? 12 Assume the contribution margin income statement prepared in requirement 6 is the 25 company's base case. What is the Margin of Safety in dollars? 26 27 Cell GPS Total 28 Sales 100 ADO 500 29 Less: Variable 40 280 30 Contribution Margin 60 160 220 31 Sales Mix 70.0% GO 32 Weighted Average Contribuion Margin: 33 1 42 480 90 34 7 Weighted Average CM Ratio 447.0% 6.27 28 29 6.30 31 6.33 6.35 6.36 37 6.57 Extra Credit Enter * Accessibility: Investigate + Type here to search D49 9 X fx D F G B H 1 AA 44.0% 34 7 Weighted Average CM Ratio 35 36 37 / Weighted average contribution margin per unit / 90 38 39 Break-even point in units Break-even point in units Break-even point in units 2 Break-even point in units 3 BE Units per Product Total fixed costs +Target profit + 1,800,000/ 90 20.000 14,000 6,000 40 41 42 43 44 + Target Profit in Units Target Profit in Units Target Profit in Units 4 Target Profit in Units 5 Target Profit Units per product = Total fixed costs + Target profit / Weighted average contribution margin per unit 180,000/ 1,980,000/ 90 45 22.000 46 15,400 6,600 47 48 Cell GPS Total 49 50 6 Sales Less: Variable Contri n Margin Les 51 52 53 Operating income 54 55 = Total fixed costs + Target profit 7 Weighted average contribution margin Ratio 56 + 57 Break-even point in Dollars Break-even point in Dollars Break-even point in Dollars 8 Break-even point in Dollars 9 BE dollars per product / 58 59 60 61 Total fixed costs +Target profit Weighted average contribution margin ratio 62 63 Target Profit in Dollars Target Profit in Dollars Target Profit in Dollars 10 Target Profit in Dollars 11 Target Profit Dollars per product 64 65 66 67 68 69 Margin of Safety Dollars Margin of Safety in Dollars = Total Sales (or Projected Sales) - Breakeven Sales MOS$ S BES 6.27 28 29 6.30 31 6.33 6.35 6.36 37 6.57 Extra Credit + Enter Accessibility: Investigate Total fixed costs. Target profit / Weighted aver: / Target Profit in Dollars Target profit in Dollars Target Profitin Dollars 10 Tarket Profitin Dollars Tak Proti Dollar per product WY Margin of Safety Dollars Margin of Nalety i Dollars - Total Nates (or Projected Sales) Breakeven Sales MONS S MONS MONS 70 71 72 74 76 78 79 111 14 6.27 28 29 6.30 31 6.36 37 Extra Credi