Question
PA6-6 (Algo) Multiproduct CVP, Analyzing Break-Even Point, Target Profit, Degree of Operating Leverage [LO 6-5, 6-6] Pin Cushion Company produces two models of sewing basket.
PA6-6 (Algo) Multiproduct CVP, Analyzing Break-Even Point, Target Profit, Degree of Operating Leverage [LO 6-5, 6-6] Pin Cushion Company produces two models of sewing basket. Information about Pin Cushions products is given below: Product A Product B Sales revenue $ 34,000 $ 49,000 Less: Variable costs 13,800 22,200 Contribution margin $ 20,200 $ 26,800 Total units sold 900 1,940 Pin Cushions fixed costs total $37,000. Required: 1. Determine Pin Cushions weighted-average unit contribution margin and weighted-average contribution margin ratio. 2. Calculate Pin Cushions break-even units and break-even sales revenue. 3. Calculate the number of units of each product that must be sold to break even. 4. Calculate the total sales necessary for Pin Cushion to earn a profit of $64,400. 5. Calculate the sales revenue generated from each product line if Pin Cushion earns its target profit of $64,400. 6. Using the original information, calculate Pin Cushions degree of operating leverage.,
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