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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
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