Question
Pin Cushion Company produces two models of sewing basket. Information about Pin Cushions products is given below: Product A Product B Sales revenue $ 32,000
Pin Cushion Company produces two models of sewing basket. Information about Pin Cushions products is given below:
Product A | Product B | |
---|---|---|
Sales revenue | $ 32,000 | $ 47,000 |
Less: Variable costs | 13,000 | 21,400 |
Contribution margin | $ 19,000 | $ 25,600 |
Total units sold | 860 | 1,900 |
Pin Cushions fixed costs total $36,400.
Required:
Determine Pin Cushions weighted-average unit contribution margin and weighted-average contribution margin ratio.
Calculate Pin Cushions break-even units and break-even sales revenue.
Calculate the number of units of each product that must be sold to break even.
Calculate the total sales necessary for Pin Cushion to earn a profit of $64,000.
Calculate the sales revenue generated from each product line if Pin Cushion earns its target profit of $64,000.
Using the original information, calculate Pin Cushions degree of operating leverage.
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