Question
Lindstrom Company produces two fountain pen models. Information about its products follows: Product A Product B Sales revenue $ 125,000 $ 200,000 Less: Variable costs
Lindstrom Company produces two fountain pen models. Information about its products follows:
Product A | Product B | ||||
Sales revenue | $ | 125,000 | $ | 200,000 | |
Less: Variable costs | 52,000 | 50,000 | |||
Contribution margin | $ | 73,000 | $ | 150,000 | |
Total units sold | 5,000 | 5,000 | |||
Lindstroms fixed costs total $83,500.
1. Determine Lindstroms weighted-average unit contribution margin and weighted-average contribution margin ratio. (Round your weighted-average CM to 2 decimal places and Weighted-Average CM Ratio to 1 decimal place (i.e. .123 should be entered as 12.3%)).
2.Calculate Lindstroms break-even point in units and in sales revenue. (Round your intermediate values to one decimal places. Round your "Sales Revenue" answer to 2 decimal places and "Sales Units" answer to the nearest whole number.)
3.Calculate the number of units that Lindstrom must sell to earn a $110,000 profit. (Round your answer to the nearest whole number.)
4.Calculate Lindstroms margin of safety and margin of safety as a percentage of sales if it sells 9,000 total pens. (Round your margin of safety in units to the nearest whole number and your percentage of sales answer to 2 decimal places (i.e. .1234 should be entered as 12.34%))
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