Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Hello, can someone please show me how to solve this. I could not find an easy to follow example in my textbook. Thanks a ton!

Hello, can someone please show me how to solve this. I could not find an easy to follow example in my textbook. Thanks a ton!

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

Multiple-Product Break-even, Break-Even Sales Revenue Cherry Blossom Products Inc. produces and sells yoga-training products: how-to DVDs and a basic equipment set (blocks, strap, and small pillows). Last year, Cherry Blossom Products sold 13,500 DVDs and 4,500 equipment sets. Information on the two products is as follows: DVDs Equipment Sets Price $8 $25 Variable cost per unit 15 Total fixed cost is $89,780. Suppose that in the coming year, the company plans to produce an extra-thick yoga mat for sale to health clubs. The company estimates that 9,000 mats can be sold at a price of $20 and a variable cost per unit of $12. Total fixed cost must be increased by $29,920 (making total fixed cost $119,700). Assume that anticipated sales of the other products, as well as their prices and variable costs, remain the same. 1. What is the sales mix of DVDs, equipment sets, and yoga mats? 3:1:2 2. Compute the break-even quantity of each product. Break-even DVDs 3,375 X units Break-even equipment sets 450 X units Break-even yoga mats 1,125 X units 3a. Prepare an income statement for Cherry Blossom Products for the coming year. Cherry Blossom Products Inc. Income Statement For the Coming Year Sales $ 400,50 Total variable cost 119,70 Contribution margin Total fixed cost Operating income $ 55,080 3b. What is the overall contribution margin ratio? Use the contribution margin ratio to compute overall break-even sales revenue. (Note: Round the contribution margin ratio to the nearest whole percent; round the break-even sales revenue to the nearest dollar.) Overall contribution margin ratio | 42.69 X % Overall break-even sales revenue $ 280,394 x 4. Compute the margin of safety for the coming year in sales dollars. $ 339,750 x

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Information Systems Control And Audit

Authors: Et Al. Hyo-Jeong Kim, Michael Mannino, Compiled By Koros Press Editorial Board

1st Edition

1781639426, 978-1781639429

Students also viewed these Accounting questions

Question

List and explain the borrowing factors?

Answered: 1 week ago

Question

5. Structure your speech to make it easy to listen to

Answered: 1 week ago

Question

1. Describe the goals of informative speaking

Answered: 1 week ago