Pledmont 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. Valero Metal Nylon Annual sales volume 100,000 200,000 400,000 Unit selling price $ 1.65 $ 1.50 $ 0.85 Variable expanne per unit $ 1.25 $ 0.70 $ 0.25 Contribution margin por unit $ 0.40 $ 0.80 $ 0.60 Total fixed expenses are $400,000 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 $240,000 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 unlt sales: Method #include each product'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 soles 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 17 4a. Calculate the break-even point in unt sales for each product using method 2 4b. If the company sells exactly the break even quantity of each product, what will bo the overall profit for the company using method 2? company sells exactly the break-even quantity of each product, what will be the overall profit for the company using meth 1? 40. 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 metho 5. Which method should the company use to calculate each product's break-even point in unit sales? 27 Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req 3a and 3b Reg 4a and 4b Reg 5 Using data from the most recent period, prepare a contribution format segmented income statement Nylon Total Piedmont Fasteners Corporation Contribution Format Income Statement Velcro Motal $ 2 $ 2 s 1 1 1 100,000 200,000 $ (99,999) (199,999) 1 Selling expenses Nariable expenses Contribution margin Sales Commissions $ 0 1 400,000 (399,999) 5 2 3 700,000 (899.997) 400.000 400,000 Not operating income $ Reg 2 > Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Req 3a and 3b Reg 4a and 4b Req 5 What is the company's overall break-even point in dollar sales? (Round your intermediate calculations to 4 decimal places and final answer to the nearest whole number.) Overall break-even point 731,818 Req 1 Req 2 Req 3a and 3b Reg 4a and 46 Req 5 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.) 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? 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 units 36. Overall prolit (loss) Reg 1 Req 2 Req 3a and 36 Req 4a and 46 Reg 5 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 27 4a. Velcro's Break-even point in units 4a. Metal's Break-even point in units 4a. Nylon's Break-even point in units 4b. Overall profit (loss)
