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
CVP Analysis of Multiple Products Alo Company produces commercial printers. One is the regular model, a basic model that is designed to copy and point on 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 15,000 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 $5,400,000 $4,896,000 $10,296,000 Less: Direct fixed costs Segment margin 1,200,000 $4,200,000 960,000 2,160,000 $3,936,000 $8,136,000 Less: Common foced costs Operating income 1,386,400 $6,749,600 Required: 1. Compute the number of regular models and deluxe models that must be sold to break even. Hound your answers to the nearest whole unit. Regular models X units Deluxe models X 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
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