Answered step by step
Verified Expert Solution
Question
1 Approved Answer
PA6-5 (Algo) Analyzing Multiproduct CVP, Break-Even Point, Target Profit, Margin of Safety [LO 6-3, 6-6] Lindstrom Company produces two fountain pen models. Information about its
PA6-5 (Algo) Analyzing Multiproduct CVP, Break-Even Point, Target Profit, Margin of Safety [LO 6-3, 6-6] Lindstrom Company produces two fountain pen models. Information about its products follows: Product A Product B $165,000 Sales revenue Less: Variable costs Contribution margin Total units sold $215,000 72,600 5,000 60,200 $154,800 5,000 $ 92,400 Lindstrom's fixed costs total $87,500. Required: 1. Determine Lindstrom's weighted-average unit contribution margin and weighted-average contribution margin ratio. 2. Calculate Lindstrom's break-even point in units and in sales revenue. 3. Calculate the number of units that Lindstrom must sell to earn a $130,000 profit. 4. Calculate Lindstrom's margin of safety and margin of safety as a percentage of sales if it sells 7,500 total pens. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Determine Lindstrom's weighted-average unit contribution margin and weighted-average contribution margin ratio. (Round your weighted-average CM to 2 decimal places and Weighted-Average CM Ratio to 1 decimal place (i.e. .123 should be entered as 12.3%)). Weighted-Average CM Weighted-Average CM Ratio per Unit % < Required 1 Required 2 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Calculate Lindstrom's break-even point in units and in sales revenue. (Round your intermediate values to one decimal places. Round your "Sales Revenue" answer to 2 decimal places and "Sales Units" answer to the nearest whole number.) Break-Even Sales Units Units Break Even Sales Revenue < Required 1 Required 3 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Calculate the number of units that Lindstrom must sell to earn a $130,000 profit. (Round your answer to the nearest whole number.) Target Sales Units Units < Required 2 Required 4 > Required 1 Required 2 Required 3 Required 4 Calculate Lindstrom's margin of safety and margin of safety as a percentage of sales if it sells 7,500 total pens. (Round your margin of safety in units to the nearest whole number and your percentage of sales answer to 2 decimal places (i.e. .1234 should be entered as 12.34%)) Margin of Safety Margin of Safety as Percentage of Sales Units % < Required 3 Required 4 >
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started