Piedmont Fasteners Corporation makes three different clothing fasteners in its manufacturing facility in North Carolina. Alt three products are sold in highly competive 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: Total foxed expenses are $409,600 per petiod. Of the total fixed expenses, $20,000 could be avoided if the Veicro product is dropped, $80,000 if the Metal product is dropped, and $60,000 if the Nylon product is dropped, The remaining foxed expenses of $249,600 consist of common fixed expenses such as administrative salaries and rent on the fectory buliding that could be avoided only by going out of business entirely. The coenpany'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 Ft. Includie each product's traceable fixed costs and an allocated share of the common foced 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 $2. Only include each product's traceable fixed 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 overall 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 1 ? 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 2 ? 5. Which method should the company use to calculate each product's break-even point in unit sales? Complete this question by entering your answers in the tabs below. 3a. Calculate the break-even point in unit sales for each product using method 1. (Do not round intermediate calculations and round your final answers to the nearest whole number,) 36. If the company sells exactly the break-even quantity of eoch product what will be the overall pront for the company using method 1 ? Total fixed expenses are $409,600 per period. Of the total fored expenses, $20,000 could be avoided if the Veicro 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 $249,600 consist of common fixed expenses such as administrative salaries and rent on the factory bullding that could be ovaided only by going out of business entirely. The company's managers would like to compus the break-even point in dollar sales for the company as a whole, and the break-even point in unit sales for eac product. They are considering two methods for computing each product's break-even point unit sales: Method tt include each producr's traceable fixed costs and an allocated share of the common fixed 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 \&2, Only include each product's traceable fixed 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 compony's overall break-even point in dollar sales? 3a. Caiculate 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 1 ? 4a. Calculate the break-even point in unit sales for each product using method 2 . 4b. If the company sells exactly the break-even quantity of each product, what will be the overall profit for the company using method 2 ? 5. Which method should the company use to calculate each product's break-even point in unit sales? Complete this question by entering your answers in the tabs below. Using data from the most recent period, prepare a contribution format segmented income statement. Pledmont Fasteners Corporation makes three different clothing fasteners in its manufacturing facility in North Carolina. All three products are soild in highly competive markets, so the company is unable to raise prices without losing an unacceptable number of customers. Dato from the most recent period concerning these products appear below: Total foced expenses are $409,600 per period. Of the'total flxed 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 $249,600 consist of common fixed expenses such as odministrative salaries and rent on the factory bullding that could be avoided only by going out of business entirely. The company's manegers would like to compute the break-even point in dollor soles for the cornpany 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 2z include each product's traceable froed costs and an allocated share of the common foxed costs in the numerator of each break-even calculation. The common ficed costs would ber allocated to the three products using sales dollars as the allocation base. Method $2 Only include each producrs traceable fixed 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 overall break-even point in dollar soles? 3a. Calculate the break-even point in unit sales for each product using method 1. 3b. If the company selis exactly the break-even quantity of each product, what wil be the overall profit for the company using method 1 ? 4a. Calculate the break-even point in unit sales for each product using method 2. 4b. If the company sells exactly the break-even quantity of each product, what will be the overall profit for the company using method 2 ? 5. Which method should the company use to calculate each peoduct's break-even point in unit sales? Complete this question by entering your answers in the tabs below. 4a. Calculate the break-even point in unit sales for each product using method 2. 4b. If the company selis exacthy the break-even quantity of each product what will be the overall profit for the company using method 27
