D29 Break-Even Point and Target Profit Measured in Units (Multiple Products) 2 Hi-Tech Incorporated produces two different products with the following monthly data GPS 400 240 Total Cell Selling price per unit Variable cost per unit Expected unit sales Sales mix % Fixed costs 100 40 6. 9,000 30,000 100% 21,000 7. 30% 70% 1,800,000 10 Assume the sales mix remains the same at all levels of sales 11 12 13 Requaired 1 Calculate the weighted average contribution margin per unit 2 How many units in total must be sold to break even? 3 How many units of each product must be sold to break even? 4 How many units in total must be sold to earn a monthly profit of $180,000? 5 How many units of each product must be sold to earn a monthly profit of $ 180,000? 6 Using the information provided, prepare a contribution margin income statement for the month 7 Caloulate the weighted average contribution margintatio 8 Find the break-even point in sales dollars 9 How much sales dollars of each product to break-even? 10 What amount of sales dollars is required to earn a monthly profit of $540,000? 11 How much sales dollars of each product to earn a montly profit of $540,000?? 12 Assume the contribution margin income statement prepared in requirement 6 is the company's base case. What is the Margin of Safety in dollars? 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Cell GPS Total Sales 28 Less: Variable 29 Contribution Margin 30 F. G. B. 26 Total Cell GPS 27 Sales Less: Variable Contribution Margin Sales Mix veigheed Arerage Contmbuan Margin 28 29 30 31 32 30 33 7 Weighted Average CM Ratio 34 35 = Total fixed costs + Target profit I Weighted average contribution margin per un Break-even point in units Break-even point in units Break-even point in units 2 Break-even point in units 3 BE Units per Product 36 37 +t 38 39 40 41 Targer Profit in Units Target Profit in Units Target Profit in Units 4 Target Profit in Units 5 Target Profit Units per product I Weighted average contribution margin per un Total fixed costs + Target profit 42 43 44 45 46 47 48 GPS Cell Total 6 Sales Less: Variable Contribution Margin Less Fixed Costs Operating Income 49 50 51 52 53 54 55 Break-even point in Dollars Break-even point in Dollars Total fixed codts + Target profit I Weighted average contribution margin Ratio 56 Break-evennnintin Dallare 67 H. Contribution Margin Less Fixed Costs Operating Income Break-even point in Dollars Break-even point in Dollars Break-even point in Dollars 8 Break-even point in Dollars 9 BE dollars per product = Total fixed costs + Target profit I Weighted average !3! Target Profit in Dollars Target Profit in Dollars Target Profit in Dollars 54 10 Target Profit in Dollars 11 Target Profit Dollars per product Total fixed costs + Target profit %3! I Weighted average =2 55 Margin of Safety Dollars Margin of Safety in Dollars = Total Sales (or Projected Sales) - Breakeven Sales 58 59 70 71 72 MOS$ MOS$ BES MOS$ %3D