Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Multiple-Product Analysis, Changes in Sales Mix, Sales to Earn Target Operating Income Basu Company produces two types of sleds for playing in the snow: basic

image text in transcribed Multiple-Product Analysis, Changes in Sales Mix, Sales to Earn Target Operating Income Basu Company produces two types of sleds for playing in the snow: basic sled and aerosled. The projected income for the coming year, segmented by product line, follows: \begin{tabular}{lrrr} & Basic Sled & Aerosled & Total \\ \hline Sales & $3,000,000 & $2,400,000 & $5,400,000 \\ Total variable cost & 1,000,000 & 1,000,000 & 2,000,000 \\ \cline { 2 - 4 } \multicolumn{1}{c}{ Contribution margin } & $2,000,000 & $1,400,000 & $3,400,000 \\ Direct fixed cost & 778,000 & 650,000 & 1,428,000 \\ \cline { 2 - 4 } Product margin & $1,222,000 & $750,000 & $1,972,000 \\ Common fixed cost & & & 198,900 \\ \cline { 2 - 4 } \multicolumn{1}{c}{ Operating income } & & & $1,773,100 \\ \hline \end{tabular} The selling prices are $30 for the basic sled and $60 for the aerosled. (Round break-even packages and break-even units to the nearest whole unit.) Required: Download Excel spreadsheet 1. Compute the number of units of each product that must be sold for Basu to break even. Basic Aero units units Basic units Aero units basic sleds would decrease by 5,000 units. Would Basu be better off with this strategy? If so, give the amount of increase in income

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

Step: 3

blur-text-image

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

Internal Auditing An Integrated Approach

Authors: Richard Cascarino

3rd Edition

1485110599, 978-1485110590

More Books

Students also viewed these Accounting questions

Question

explain what is meant by redundancy

Answered: 1 week ago