Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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%))

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_2

Step: 3

blur-text-image_3

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

Dyslexia A Practitioners Handbook

Authors: Gavin Reid

5th Edition

1118980107, 9781118980101

More Books

Students also viewed these Accounting questions

Question

4-40. Dont hesitate to call our office any time.

Answered: 1 week ago