Question
Cornerstone Exercise 16.5 (Algorithmic) Multiple-Product Break-Even and Target Profit Vandenberg, Inc., produces and sells two products: a ceiling fan and a table fan. Vandenberg plans
Cornerstone Exercise 16.5 (Algorithmic) 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 30,000 ceiling fans and 90,000 table fans in the coming year. Product price and cost information includes:
Ceiling Fan | Table Fan | ||||||
Price | $50 | $11 | |||||
Unit variable cost | $11 | $4 | |||||
Direct fixed cost | $20,800 | $46,000 |
Common fixed selling and administrative expenses total $80,000.
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? Do not round intermediate calculations. If required, round your final answers to the nearest whole number.
Break-even ceiling fans | |
Break-even table fans |
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