Multiple-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		$58				$11
Unit variable cost		$8				$6
Direct fixed cost		$24,600				$41,000

Common fixed selling and administrative expenses total $76,000.

Required:

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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 = fill in the blank c34381ff902e043_1 : fill in the blank c34381ff902e043_2

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	fill in the blank c34381ff902e043_3
Break-even table fans	fill in the blank c34381ff902e043_4

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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
Common fixed expensesContribution marginDirect fixed expensesProduct marginSales	$- Select -	$- Select -	$- Select -
Less: Common fixed expensesLess: Direct fixed expensesLess: Product marginLess: SalesLess: Variable expenses	- Select -	- Select -	- Select -
Common fixed expensesContribution marginProduct marginSalesVariable expenses	$- Select -	$- Select -	$- Select -
Less: Common fixed expensesLess: Contribution marginLess: Direct fixed expensesLess: SalesLess: Variable expenses	- Select -	- Select -	- Select -
Common fixed expensesDirect fixed expensesProduct marginSalesVariable expenses	$- Select -	$- Select -	$- Select -
Less: Common fixed expensesLess: Contribution marginLess: Direct fixed expensesLess: Product marginLess: Variable expenses			- Select -
Common fixed expensesContribution marginDirect fixed expensesOperating incomeOperating loss			$- Select -

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4. What if Vandenberg, Inc., wanted to earn operating income equal to $14,400? 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 $14,400.) Round your intermediate calculations and final answers to nearest number.

Break-even ceiling fans	fill in the blank 0d18b1013ff3069_1
Break-even table fans	fill in the blank 0d18b1013ff3069_2