Multiple Product Break Even and Target Profit
Multiple-Product Break-Even and Target Profit Vandenberg, Inc., produces and sells two products: a celling fan and a table fan. Vandenberg plans to sell 20,000 ceiling fans and 50,000 table fans in the coming year. Product price and cost Information includes: Ceiling Fan Table Fan Price $54 $13 Unit variable cost $8 $9 Direct fixed cost $25,200 $42,000 Common fixed selling and administrative expenses total $96,000. Required: 1. What is the sales mix estimated for next year (calculated to the lowest whole number for each product)? Sales mix of celling fans to table fans = 2. Using the sales mix from Requirement 1, form a package of ceiling fans and table fans. How many ceiling fans and table fans are sold at break-even? Round your intermediate calculations and final answers to the nearest whole number. Break-even ceiling fans Break-even table fans 3. Prepare a contribution-margin-based income statement for Vandenberg, Inc., based on the unit sales calculated in Requirement 2. If an amount is zero, enter "0". Enter any negative product margin and losses with a minus sign. Do not round intermediate calculations. Round your final answers to nearest dollar. Vandenberg, Inc. Contribution-Margin-Income Statement For the Coming Year Ceiling Fans Table Fans Total 101 4. What if Vandenberg, Inc., wanted to earn operating income equal to $15,2007 Calculate the number of ceiling fans and table fans that must be sold to earn this level of operating income. (Hint: Remember to form a package of ceiling fans and table fans based on the sales mix and to first calculate the number of packages to earn an operating income of $15,200.) Round your intermediate calculations and final answers to nearest number. Break-even ceiling fans Break-even table fansMultiple-Product Break-Even and Target Profit Vandenberg, Inc., produces and sells two products: a ceiling fan and a table fan. Vandenberg plans to sell 20,000 ceiling fans and 50,000 table fans in the coming year. Product price and cost information includes: Ceiling Fan Table Fan Price $54 $13 Unit variable cost $8 $9 Direct fixed cost $25,200 $42,000 Common fixed selling and administrative expenses total $96,000. Required: 1. What is the sales mix estimated for next year (calculated to the lowest whole number for each product)? Sales mix of ceiling fans to table fans = 2 V : 5 V 2. Using the sales mix from Requirement 1, form a package of ceiling fans and table fans. How many ceiling fans and table fans are sold at break-even? Round your intermediate calculations and final answers to the nearest whole number. Break-even ceiling fans 2,925 X Break-even table fans 7,162 X 3. Prepare a contribution-margin-based income statement for Vandenberg, Inc., based on the unit sales calculated in Requirement 2. If an amount is zero, enter "0". Enter any negative product margin and losses with a minus sign. Do not round intermediate calculations. Round your final answers to nearest dollar. Vandenberg, Inc. Contribution-Margin-Income Statement For the Coming Year Ceiling Fans Table Fans Total Sales v $ 157,950 X 93,106 X $ 251,056 Less: Variable expenses 23,400 X 64,458 X 87,858 X Contribution margin v 134,550 X 28,648 X $ 163,198 X Less: Direct fixed expenses v 25,200 42,000 67,200 Product margin v 109,350 X -13,352 95,998 X Less: Common fixed expenses v 96,000 Operating income x - 2 X 4. What if Vandenberg, Inc., wanted to earn operating income equal to $15,200? Calculate the number of ceiling fans and table fans that must be sold to earn this level of operating income. (Hint: Remember to form a package of ceiling fans and table fans based on the sales mix and to first calculate the number of packages to earn an operating income of $15,200.) Round your intermediate calculations and final answers to nearest number. Break-even ceiling fans 3,198 X Break-even table fans 7,828 X
