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Multiple - Product Break - even, Break - Even Sales Revenue Andrews Sporting Goods, Inc., produces and sells children's softball mitts: vinyl mitts and basic

Multiple-Product Break-even, Break-Even Sales Revenue
Andrews Sporting Goods, Inc., produces and sells children's softball mitts: vinyl mitts and basic leather mitts. Last year, Andrews sold 24,000 vinyl mitts and 12,000 leather mitts. Information on the two products is as follows:
Line Item Description Vinyl Mitts Leather Mitts
Price $10 $16
Variable cost per unit 610
Total fixed cost is $93,500.
Suppose that in the coming year, the company plans to produce an autographed mitt. The company estimates that 6,000 autographed mitts can be sold at a price of $20 and a variable cost per unit of $12. Total fixed cost must be increased by $17,800(making total fixed cost $111,300). Assume that anticipated sales of the other products, as well as their prices and variable costs, remain the same.
Unless otherwise instructed, round all total dollar figures (e.g., sales, total contribution margin) to the nearest dollar, breakeven or target units to the nearest unit, and unit costs and unit contribution margins to the nearest cent. Round ratios to four significant digits.
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Question Content Area
1. What is the sales mix of vinyl mitts, leather mitts, and autographed mitts?
4:2:1
2. Compute the break-even quantity of each product. (Round break-even packages to four significant digits and break-even units to the nearest whole unit.)
Line Item Description Answer
Break-Even Vinyl Mitts fill in the blank 2 of 7
57.14
units
Break-Even Leather Mitts fill in the blank 3 of 7
28.57
units
Break-Even Autographed Mitts fill in the blank 4 of 7
14.29
units
Feedback Area
Feedback
1. See text section "Determining the Sales Mix."
Question Content Area
3a. Prepare an income statement for Andrews Sporting Goods, Inc. for the coming year.
Andrews Sporting Goods Inc.
Income Statement
For the Coming Year
Line Item Description Amount
Sales
$Sales
564,000
Total variable cost
Total variable cost
336,000
Contribution margin
$Contribution margin
228,000
Total fixed cost
Total fixed cost
120,840
Operating income
$Operating income
107,160
Feedback Area
Feedback
3a. Prepare contribution margin income statement.
Question Content Area
3b. What is the overall contribution margin ratio? Use the contribution margin ratio to compute overall break-even sales revenue. (Note: Round the contribution margin ratio to two decimal places; round the break-even sales revenue to the nearest dollar.)
Line Item Description Answer
Overall contribution margin ratio fill in the blank 5 of 7
40
%
Overall break-even sales revenue fill in the blank 6 of 7$
298,538
4. Compute the margin of safety for the coming year in sales dollars.
fill in the blank 7 of 7$
265,462

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