Piedmont Fasteners Corporation makes three different clothing fasteners in its manufacturing facility in North Carolina. All three products are sold in highly competitive markets, so the company is unable to raise prices without losing an unacceptable number of customers. Data from the most recent period concerning these products appear below Metal 201.600 5 1.50 5.0.70 $ 0.80 Nylon 403,200 $ 0.85 5 0.25 $ 0.0 Velcro Annual sales volume 100,800 Unit selling price $ 1.55 Variable expense per unit $1.25 Contribution margin per unit 58.40 Total foxed expenses are $403.200 per period of the total fixed expenses. $20.000 could be avoided if the Velcro product is dropped, $80.000 if the Metal product is dropped, and $60,000 if the Nylon product is dropped. The remaining fixed expenses of $243 200 consist of common fixed expenses such as administrative salaries and rent on the factory building that could be avoided only by going out of business entirely The company's managers would like to compute the break-even point in dollar sales for the company as a whole and the break even point in unit sales for each product. They are considering two methods for computing each product's break-even point unit sales Method #include each product's traceable foed costs and an allocated share of the common foxed costs in the numerator of each break-even calculation The common fixed costs would be allocated to the three products using sales dollars as the allocation base. Method 82 Only include each product's traceable foed costs in the numerator of each break even calculation Required: 1. Using data from the most recent period, prepare a contribution format segmented income statement 2. What is the company's over-all break-even point in dollar sales? 3a. Calculate the break-even point in unit sales for each product using method 1 3b. If the company sells exactly the break-even quantity of each product what will be the overall profit for the company using method 12 4a. Calculate the break-even point in unit sales for each product using method 2 46. If the company sells exactly the break-even quantity of each product, what will be the overall profit for the company using method 5. Which method should the company use to calculate each product's break-even point in unit sales? 22 Complete this question by entering your answers in the tabs below. Regt Reg 2 Req 3a and 36 Req 4a and 46 Reg 5 3a. Calculate the break-even point in unit sales for each product using method 1. (Do not round intermediate calculations and final answers to the nearest whole number) 3b. If the company sells exactly the break-even quantity of each product what will be the overall profit for the company using method 17 Show less 3a Velcro's Break-even point in units 3a. Metal's Break-even point in units 3a Nylon's Break-even point in uns 36 Overall profit (los) $ ( Req2 Reg da and 4 >
