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Current Designs manufactures two different types of kayaks, rotomolded kayaks and composite kayaks. The following information is available for each product line. Sales price/unit Variable
Current Designs manufactures two different types of kayaks, rotomolded kayaks and composite kayaks. The following information is available for each product line. Sales price/unit Variable costs/unit Rotomolded $900 $540 Composite $2,000 $1,340 The company's fixed costs are $772,800. An analysis of the sales mix identifies that rotomolded kayaks make up 80% of the total units sold. Determine the weighted average unit contribution margin for Current Designs. $ $ Weighted-average unit contribution margin Determine the break-even point in units for Current Designs and identify how many units of each type of kayak will be sold at the break-even point. Break-even sales units Rotomolded Kayaks Composite Kayaks Break-even sales distribution units units Assume that the sales mix changes, and rotomolded kayaks now make up 70% of total units sold. Calculate the total number of units that would need to be sold to earn a net income of $1,877,700 and identify how many units of each type of kayak will be sold at this level of income. Required sales units Rotomolded Kayaks Composite Kayaks Break-even sales distribution units units Assume that Current Designs will have sales of $2,700,000 with two-thirds of the sales dollars in rotomolded kayaks and one- third of the sales dollars in composite kayaks. Assuming $620,000 of fixed costs are allocated to the rotomolded kayaks and $152,800 to the composite kayaks, prepare a CVP income statement for each product line. Rotomolded Kayaks Composite Kayaks > $ $ $ > > $ $ $ Calculate the degree of operating leverage for each product line. (Round answers to 2 decimal places, e.g. 52.75.) Rotomolded Kayaks Composite Kayaks Degree of operating leverage
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