Located on Swiftcurrent Lake in Glacier National Park, Many Glacier Hotel was built in 1915 by the Great Northern Railway. To supplement its lodging revenue, the hotel decided to begin manufacturing and selling small wooden canoes decorated with symbols hand painted by Native Americans living near the park. The canoes were a great success, so a couple of years later the hotel began manufacturing and selling paddles. Many hotel guests purchase a canoe and paddles for use in self-guided tours of Swiftcurrent Lake. Because production of the two products began in different years, the canoes and paddles are produced in separate production facilities and employ different laborers. Each canoe sells for $540, and each paddle sells for $60. About 15 years ago, a fire destroyed the hotels accounting records. A new system put into place before the next season provides the following aggregated data for the hotels canoe and paddle manufacturing and marketing activities (Years 1 through 12 give the data for the years in which the new accounting system was active):

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3. Cost-Volume-Profit Analysis, Multiple-Product Setting

The hotels accounting system data show an average sales mix of approximately 300 canoes and 1,200 paddles each season. Significantly more paddles are sold relative to canoes because some inexperienced canoe guests accidentally break one or more paddles, while other guests purchase additional paddles as presents for friends and relatives. In addition, for this multiple-product CVP analysis, assume there is an additional $28,000 of common fixed costs for a customer service hotline used for both canoe and paddle customers. Use CVP analysis to calculate the break-even point in units for both the canoe and paddle product lines combined (i.e., the multiple-product setting).

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