Problem 4 20 Sales Mix Multi Product Break Even Analysis LO9 Smithen Company, a wholesale distributor, has been operating for only a few months The company sells three productssinks, mirrors, and vanities Budgeted sales by product and in total for the coming month are shown below based on planned unit sales as follows Units Percentage Sinks 500 45 Mirrors 300 27 Vanities 300 27 Total 1,100 100 Product Sinks Mirrors Vanities Total Percentage of total sales 42 30 28 100 Sales $ 213,362 50 100 $ 151,500 100 $ 140,137 50 100 $ 505,000 00 100 Variable expenses 42,672 50 20 106,050 70 63,061 88 45 211,784 38 42 Contribution margin $ 170,690 00 80 $ 45,450 30 $ 77,075 63 55 293,215 63 58 Contribution margin per unit $ 341 38 $ 151 50 $ 256 92 Fixed expenses 255,780 00 Operating income $ 37,435 63 Break even point in sales dollars Fixed expenses $255,780 $441,000 Overall CM ratio 0 58 Break even point in unit sales Total Fixed expenses $255,780 959 56 units Weighted average CM per unit $266 56 ($341 38 0 45) ($151 50 0 27) ($256 92 0 27) Assume that actual sales for the month total $608,576 (1,300 units), with the CM ratio and per unit amounts the same as budgeted Actual fixed expenses are the same as budgeted, $255,780 Actual sales by product are as follows sinks, $194,160 (455 units) mirrors, $262,600 (520 units) and vanities, $151,816 (325 units) Required 1 Prepare a contribution format income statement for the month based on actual sales data (Round your percentage answers to the nearest whole number ) 2 Compute the break even point in sales dollars for the month, based on the actual data (Round your intermediate calculations to the nearest whole percent Round your final answer to the nearest whole dollar ) 3 Calculate the break even point in unit sales for the month, based on the actual data (Round your final answer to the nearest whole number )

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Problem 4-20 Sales Mix; Multi-Product Break-Even Analysis [LO9] Smithen Company, a wholesale distributor, has been operating for only a few months. The company sells three

Problem 4-20 Sales Mix; Multi-Product Break-Even Analysis [LO9]

Smithen Company, a wholesale distributor, has been operating for only a few months. The company sells three productssinks, mirrors, and vanities. Budgeted sales by product and in total for the coming month are shown below based on planned unit sales as follows:

	Units	Percentage
Sinks	500	45	%
Mirrors	300	27	%
Vanities	300	27	%

Total	1,100	100	%

	Product

	Sinks					Mirrors					Vanities					Total
Percentage of total sales		42	%				30	%				28	%				100	%
Sales	$	213,362.50		100	%	$	151,500		100	%	$	140,137.50		100	%	$	505,000.00		100	%
Variable expenses		42,672.50		20	%		106,050		70	%		63,061.88		45	%		211,784.38		42	%

Contribution margin	$	170,690.00		80	%	$	45,450		30	%	$	77,075.63		55	%		293,215.63		58	%

Contribution margin per unit	$	341.38				$	151.50				$	256.92

Fixed expenses																	255,780.00

Operating income																$	37,435.63

Break-even point in sales dollars	=	Fixed expenses	=	$255,780	=	$441,000

		Overall CM ratio		0.58

Break-even point in unit sales:

Total Fixed expenses		$255,780
	=		= 959.56 units
Weighted-average CM per unit		$266.56*

*($341.38 0.45) + ($151.50 0.27) + ($256.92 0.27)

Assume that actual sales for the month total $608,576 (1,300 units), with the CM ratio and per unit amounts the same as budgeted. Actual fixed expenses are the same as budgeted, $255,780. Actual sales by product are as follows: sinks, $194,160 (455 units); mirrors, $262,600 (520 units); and vanities, $151,816 (325 units).

Required:

1. Prepare a contribution format income statement for the month based on actual sales data. (Round your percentage answers to the nearest whole number.)

2. Compute the break-even point in sales dollars for the month, based on the actual data. (Round your intermediate calculations to the nearest whole percent. Round your final answer to the nearest whole dollar.)

3. Calculate the break-even point in unit sales for the month, based on the actual data. (Round your final answer to the nearest whole number.)