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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 40,000 ceiling
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 40,000 ceiling fans and 60,000 table fans in the coming year. Product price and cost information includes: Ceiling Fan Table Fan Price $56 $15 Unit variable cost Direct fixed cost $17 $6 $41,000 $22,600 Common fixed selling and administrative expenses total $74,000. 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 : 3 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 2,392 Break-even table fans 3,588 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 "O". 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 Sales $ 2,392 x $ 3,588 x Less: Variable expenses 133,952 60,996 Total $ 5,980 X 194,948 Contribution margin $ 35,880 X X $ $ 21,528 41,000 57,408 | 63,600 Less: Direct fixed expenses 22,600 Product margin $ 75,472 X $ -1,532 X 73,940 Less: Common fixed expenses 74,000 Operating income -60 X 4. What if Vandenberg, Inc., wanted to earn operating income equal to $15,600? 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 $15,600.) Round your intermediate calculations and final answers to nearest number. Break-even ceiling fans 2,664 Break-even table fans 3,996
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