Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

PA6-5 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

PA6-5 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 Sales revenue $ 75,000 $ 125,000 Less: Variable costs 33,000 38,000 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Contribution margin $ 42,000 $ 87,000 Total units sold 5,000 5,000 -------------------------------------------------------------------------------- Lindstroms fixed costs total $78,500. Required: 1. Determine Lindstroms weighted-average unit contribution margin and weighted-average contribution margin ratio. (Round your answer to 2 decimal places.) 2. Calculate Lindstroms break-even point in units and in sales revenue. (Round your "Sales Revenue" answer to 2 decimal places and "Sales Units" answer to the nearest whole number.) 3. Calculate the number of units that Lindstrom must sell to earn a $150,000 profit. (Round your answer to the nearest whole number. Use the amounts calculated in Requirement 1 ) 4. Calculate Lindstroms margin of safety and margin of safety as a percentage of sales if it sells 8,000 total pens. (Round your percentage of sales answer to 2 decimal places and the other answer to the nearest whole number.) rev: 07_23_2013_QC_32670 check my workreferencesebook & resource2015 McGraw-Hill Education

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

Financial Statement Analysis And Security Valuation

Authors: Stephen H Penman

4th Edition

0073379662, 9780073379661

More Books

Students also viewed these Accounting questions

Question

What is the cerebrum?

Answered: 1 week ago

Question

8. What values do you want others to associate you with?

Answered: 1 week ago