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	$	43,000		$	58,000
Less: Variable costs		17,400			25,800
Contribution margin	$	25,600		$	32,200
Total units sold		1,080			2,120

Pin Cushions fixed costs total $39,700.

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 $66,200.

5. Calculate the sales revenue generated from each product line if Pin Cushion earns its target profit of $66,200.

6. Using the original information, calculate Pin Cushions degree of operating leverage.

Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Determine Pin Cushion's weighted average unit contribution margin and weighted-average contribution margin ratio. (Round your intermediate calculations to 2 decimal places. Round your CM per unit and weighted average CM ratio to two decimal places (i.e. .1234 should be entered as 12.34%.) Weighted-Average Unit CM Weighted-Average CM Ratio % Required 1 Required 2 > Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Calculate Pin Cushion's break-even units and break-even sales revenue. (Round your units to the nearest whole number and sales revenue to two decimal places.) Units Break-Even Sales Units Break Even Sales Revenue Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Calculate the number of units of each product that must be sold to break even. (Round your answers to the nearest whole number.) Product A Product B No. of Units Units Units Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Calculate the total sales necessary for Pin Cushion to earn a profit of $66,200. (Round your intermediate calculations to 2 decimal places. Round your answer to 2 decimal places.) Target Sales Revenue Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Calculate the sales revenue generated from each product line if Pin Cushion earns its target profit of $66,200. (Round your intermediate calculations to 2 decimal places. Round your answers to 2 decimal places.) Product A Product B Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Using the original information, calculate Pin Cushion's degree of operating leverage. (Round your answer to 2 decimal places.) Degree of Operating Leverage