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CVP Analysis of Multiple Products Steinberg Company produces commercial printers. One is the regular model, a basic model that is designed to copy and print
CVP Analysis of Multiple Products Steinberg 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, Steinberg expects to sell 80,000 regular models and 16,000 deluxe models. A segmented income statement for the two products is as follows: Regular Model Deluxe Model Total Sales $12,000,000 $10,720,000 $22,720,000 Less: Variable costs 7,200,000 6,432,000 13,632,000 Contribution margin $4,800,000 $4,288,000 $9,088,000 Less: Direct fixed costs 1,200,000 960,000 2,160,000 2 Segment margin $3,600,000 $3,328,000 $6,928,000 Less: Common fixed costs 1,588,800 Operating income $5,339,200 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 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 Sales $12,000,000 $10,720,000 $22,720,000 Less: Variable costs 7,200,000 6,432,000 13,632,000 Contribution margin $4,800,000 $4,288,000 $9,088,000 Less: Direct fixed costs 1,200,000 960,000 2,160,000 Segment margin $3,600,000 $3,328,000 $6,928,000 Less: Common fixed costs 1,588,800 Operating income $5,339,200 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 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 b even. Round the contribution margin ratio to four decimal places. Use the rounded value in the subsequent computation. (Express as a decimal-bas amount rather than a whole percentage.) Round the amount of revenue to the nearest dollar. Contribution margin ratio 0.4000 Revenue
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