Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

International Printer Machines (IPM) builds three computer printer models: Alpha, Beta, and Gamma. Information for these three products is as follows: AlphaBetaGammaTotal Selling price per

International Printer Machines (IPM) builds three computer printer models: Alpha, Beta, and Gamma. Information for these three products is as follows:

AlphaBetaGammaTotal

Selling price per unit$250$400$1 500

Variable cost per unit$80$200$800

Expected unit sales12,0006,0002,00020,000

(annual)

Sales mix50 %40%10%100%

Total annual fixed costs are $5,000,000. Assume the sales mix remains the same at all levels of sales.

Required:

a) Calculate the weighted average unit contribution margin, assuming a constant sales mix.

b) How many units of each printer must be sold to break even?

c)

i) Explain what is margin of safety.

ii) Calculate in sales units the margin of safety for IPM, assuming projected sales are

25,000 units?

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

Accounting Tools For Business Decision Making

Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso

7th Edition

1-119-57105-6, 978-1119571056

More Books

Students also viewed these Accounting questions

Question

Contrast the common-law family with the socialist-law family.

Answered: 1 week ago

Question

Peoples understanding of what is being said

Answered: 1 week ago

Question

The quality of the proposed ideas

Answered: 1 week ago