Answered step by step
Verified Expert Solution
Link Copied!

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

image text in transcribedimage text in transcribed

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, 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 follows: Regular Model Deluxe Model Total Sales $13,500,000 $12,240,000 $25,740,000 Less: Vanable costs 8,100,000 7,344,000 15,444,000 Contribution margin Less: Direct fixed costs Segment margin $5,400,000 1,200,000 $4,200,000 $4,896,000 $10,296,000 960,000 2,160,000 $3,936,000 $8,136,000 Less: Common fixed costs Operating income 1,615,200 $6,520,800 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 84,646 X 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 Operating income Required: $6,520,800 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 84,646 X 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 Feedback Check My Work 1. Create a table that includes price, variable cost, contribution margin, sales mix, and package contribution margin, Calculate price and variable cost per unit for each product. Calculate the package unit contribution margin. Use the following formula to calculate the total number of breakeven packages for the sales mix: Total foced cost/ Package contribution margin. Determine break-even in units for mach product by applying sales mox ratios calculated in the table. 2. Calculate contribution margin ratio (Contribution margin / Sales). Determine revenue by dividing Total fixed costs by Contribution margin ratio

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Reporting and Analysis Using Financial Accounting Information

Authors: Charles H. Gibson

13th edition

1285401603, 1133188796, 9781285401607, 978-1133188797

More Books

Students also viewed these Accounting questions

Question

2. Recognize students who are helpful.

Answered: 1 week ago

Question

Talk with others about their online payment experiences.

Answered: 1 week ago