Answered step by step
Verified Expert Solution
Question
1 Approved Answer
CVP Analysis of Multiple Products Alo Company produces commercial printers. One is the regular model, a basic model that is designed to copy and print
CVP Analysis of Multiple Products Alo Company produces commercial printers. One is the regular model, a basic model that is designed to copy and print in black and white. Another model, the deluxe model, is a color printer-scanner-copier. For the coming year, Alo expects to sell 90,000 regular models and 18,000 deluxe models. A segmented income statement for the two products is as follows: Regular Model Deluxe Model Total Sales $13,500,000 $12,240,000 $25,740,000 Less: Variable costs 8,100,000 7,344,000 15,444,000 Contribution margin Loss: Direct fixed costs Segment margin $5,400,000 1,200,000 14,200,000 $4,896,000 $10,296,000 960,000 $3,936,000 2.160,000 $8,136,000 Less: Common fixed costs 1,729,600 Operating income $6,406,400 Required: 1. Compute the number of regular models and deluxe models that must be sold to break even. Round your answers to the nearest whole unit. Regular models Deluxe models units units 2. Using information only from the total column of the income statement, compute the sales revenue that must be generated for the company to break even. Round the contribution margin ratio to four decimal places. Use the rounded value in the subsequent computation. (Express as a decimal-based amount rather than a whole percentage.) Round the amount of revenue to the nearest dollar. Contribution margin ratio Revenue
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started