Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

Please help me correct any incorrect data input here and fill in the missing blanks (indicated by '???') Problem 7-54 Multiple-Product Analysis, Changes in Sales

Please help me correct any incorrect data input here and fill in the missing blanks (indicated by '???')

image text in transcribed

image text in transcribed

Problem 7-54 Multiple-Product Analysis, Changes in Sales Mix, Sales to Earn Target Operating Income Objective 2,4 Basu Company produces two types of sleds for playing in the snow: basic sled and aerosled. The projected income for the coming year, segmented by product line, follows: EXCEL Sales Total variable cost Contribution margin Direct fixed cost Product margin Common fixed cost Operating income Basic Sled $3,000,000 1,000,000 $2,000,000 778,000 $1,222,000 Aerosled $2,400,000 1,000,000 $1,400,000 650,000 $ 750,000 Total $5,400,000 2,000,000 $3,400,000 1,428,000 $1,972,000 198,900 $1,773.100 The selling prices are $30 for the basic sled and $60 for the aerosled. (Round break-even packages and break-even units to the nearest whole unit.) Required: 1. Compute the number of units of each product that must be sold for Basu to break even. 2. Assume that the marketing manager changes the sales mix of the two products so that the ratio is five basic sleds to three aerosleds. Repeat Requirement 1. Answer + Check Figure: Break-even basic sleds = 39,680 3. Conceptual Connection Refer to the original data. Suppose that Basu can increase the sales of aerosleds with increased advertising. The extra advertising would cost an additional $195,000, and some of the potential purchasers of basic sleds would switch to aerosleds. In total, sales of aerosleds would increase by 12,000 units, and sales of basic sleds would decrease by 5,000 units. Would Basu be better off with this strategy? Answer + Check Figure: Increase in total contribution margin = $320,000 A B C D E F G . 2 5 4 1 5 6 P7-54 Quiz 4 - Chapter 7 1st; determine the total package CM based on the sales mix or you compute the weighted avg CM based on the % sales mix Product Unit CM Sales Mix Total CM Basic $20 5+7 $2,000,000 Aero 352+7 1400000 Total ??? 7 8 9 10 11 12 13 2nd; determine the overall break-even # of packages using the total unit CM or you determine the total units sold at breakeven using the weighted avg CM Break-even = 66,990 14 3rd; determine the # of units of each product at the break-even point 15 16 17 Break-even point for Basic Break-even point for Aero 47,850 19,1401 18 19 20 21 22 2 1st; determine the total package CM based on the sales mix or you compute the weighted avg CM based on the % sales mix Product Unit CM Sales Mix Total CM Basic $20 5-8 $2,000,000 Aero 35 3+8 1400000 Total 23 24 25 ??? 26 27 28 2nd; determine the overall break-even # of packages using the total unit CM or you determine the total units sold at breakeven using the weighted avg CM Break-even = 63,489 29 30 31 3rd; determine the # of units of each product at the break-even point 32 33 Break-even point for Basic Break-even point for Aero 39,6801 23,808 34 35 3 36 37 38 (12,000*35)-(5000*20)-195000 125000 39 40 41 42 43 44 Increase or (Decrease) in operating income = 125,000 45

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting What the Numbers Mean

Authors: David H. Marshall, Wayne W. McManus, Daniel F. Viele,

9th Edition

978-0-07-76261, 0-07-762611-7, 9780078025297, 978-0073527062

Students also viewed these Accounting questions