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CVP; multiproduct Mel's Accessories sells wallets and money clips. Historically, the firm's sales have averaged three wallets for every money clip. Each wallet has
CVP; multiproduct Mel's Accessories sells wallets and money clips. Historically, the firm's sales have averaged three wallets for every money clip. Each wallet has an $8 contribution margin, and each money clip has a $6 contribution margin. Mel's incurs fixed cost in the amount of $360,000. The selling prices of wallets and money clips, respectively, are $30 and $15. The corporate-wide tax rate is 40 percent. a. How much revenue is needed to break even? $ 0 How many wallets and money clips does this represent? wallets money clips b. How much revenue is needed to earn a pre-tax profit of $300,000? Note: Do not round until you determine the number of units of each product; round number of units to the next highest whole unit in your calculations. $ 0 c. How much revenue is needed to earn an after-tax profit of $300,000? Note: Do not round until you determine the number of units of each product; round number of units to the next highest whole unit in your calculations. $ 0 d. If Mel's earns the revenue determined in (b) but does so by selling five wallets for every two money clips, what would be the pre-tax profit (or loss)? Note: Do not round until you determine the number of units of each product; round number of units to the next highest whole unit in your calculations. $ 0
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