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Data Table i - X Total Standard Carrier 108,000 Deluxe Carrier 72,000 Units sold 180,000 $ 3,240,000 $ 2,376,000 3,240,000 $ 1,944,000 6,480,000 4,320,000 Revenues
Data Table i - X Total Standard Carrier 108,000 Deluxe Carrier 72,000 Units sold 180,000 $ 3,240,000 $ 2,376,000 3,240,000 $ 1,944,000 6,480,000 4,320,000 Revenues at $30 and $45 per unit Variable costs at $22 and $27 per unit Contribution margin at $8 and $18 per unit Fixed costs $ 864,000 $ 1,296,000 2,160,000 1,800,000 ke $ 360,000 Operating income Print Done The Coughlin Company retails two products, a standard and a deluxe version of a luggage carrier. The budgeted income statement is as follows: ES: (Click the icon to view the budgeted income statement.) Requirements 1. Compute the breakeven point in units, assuming that the planned revenue mix is maintained. 2. Compute the breakeven point in units (a) if only standard carriers are sold and (b) if only deluxe carriers are sold. 3. Suppose 180,000 units are sold, but only 60,000 of them are deluxe. Compute the operating income. Compute the breakeven point if these relationships persist in the next period. Compare your answers with the original plans and the answer in requirement 1. What is the major lesson of this problem? Requirement 1. Compute the breakeven point in units, assuming that the planned sales mix is attained. Begin by determining the sales mix. For every 2 deluxe unit(s) sold standard units are sold. Determine the formula used to calculate the breakeven point when there is more than one product sold. Then, enter the amounts in the formula to calculate the breakeven point. Breakeven point in bundles The breakeven point is | standard units and deluxe units. Requirement 2. Compute the breakeven point in units (a) if only standard carriers are sold and (b) if only deluxe carriers are sold. (a) If only standard carriers are sold the breakeven point is units. (b) If only deluxe carriers are sold the breakeven point is units. Requirement 3. Compute the operating income if 180,000 units are sold but only 60,000 of them are deluxe. Standard Carrier Total Deluxe Carrier 60,000 180,000 Units sold Revenues at $30 and $45 per unit Variable costs at $22 and $27 per unit Contribution margin Fixed costs Operating income Before calculating the breakeven points, determine the new sales mix. For every 1 deluxe carrier sold, standard carriers are sold. Compute the breakeven point in units assuming the new sales mix. (Round your answer up to the nearest whole number.) The breakeven point is | standard units and deluxe units. Compare your answer with the answer to requirement 1. What is the major lesson of this problem? In this example, the budgeted and actual total sales in number of units were identical, but the proportion of The major lesson of this problem is that changes in the sales mix change the product having the contribution margin declined. Operating income and the breakeven point
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