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 products-sinks, mirrors, and vanities. Budgeted sales by product and in total for the coming month are shown below based on planned unit sales as follows: ($328.000.50)+($208.000.25)+($364.000.25) As shown by these data, operating income is budgeted at $43,400 for the month, break-even sales dollars at $792,868.21, and breakeven unit sales at 1,961.89. Assume that actual sales for the month total $856,800 (2,100 units), with the CM ratio and per unit amounts the same as budgeted. Actual fixed expenses are the same as budgeted, $602,300. Actual sales by product are as follows: sinks, $214,200 ( 525 units); mirrors, $357,000 (1,050 units); and vanities, $285,600 (525 units). Required: 1. Prepare a contribution format income statement for the month based on actual sales data. (Round your answers to 2 decimal places.) 2. Compute the break-even point in sales dollars for the month, based on the actual data. (Round your percentage answers to nearest whole percent. Round other intermediate values and final answer to the nearest whole dollar.) 3. Calculate the break-even point in unit sales for the month, based on the actual data. (Do not round your intermediate calculations. Round your final answer to the nearest whole number.) 4. This part of the question is not part of your Connect assignment. Warm Hands, a small company based in Prince Edward Island, manufactures and sells two types of lightweight gloves for runnersWarm and Cozy. Current revenue, cost, and unit sales data for the two products appear below: Fixed expenses are $2,970 per month. Required: 1. Assuming the sales mix above, do the following: a. Prepare a contribution format income statement showing both dollars and percentage columns for each product and for the company as a whole. (Round percentage answers to 2 decimal places.) b. Compute the break-even point in sales dollars for the company as a whole and the margin of safety in both dollars and percentage of sales. (Do not round your intermediate calculations. Round percentage answer to 2 decimal places.) c. Compute the break-even point in units for the company as a whole and the margin of safety in both units (pairs of gloves) and percentage of sales. (Round percentage answer to 2 decimal places.) d. Compute how many pairs of gloves must be sold overall if the company wants to make an after-tax target profit of $7,875 and the tax rate is 30%. Assume that the sales mix remains the same as shown above. Competition is intense, and Frieden Company's profits vary considerably from one year to the next. Management is exploring opportunities to increase profitability. Required: 1. Frieden's management is considering a major upgrade to the manufacturing equipment, which would result in fixed expenses increasing by $405,000 per month. However, variable expenses would decrease by $9 per unit. Selling price would not change. Prepare two contribution format income statements, one showing current operations and one showing how operations would appear if the upgrade is completed. Show an Amount column, a Per Unit column, and a Percentage column on each statement. 2. Refer to the income statements in requirement 1 above. For both current operations and the proposed new operations, compute (a) the degree of operating leverage, (b) the break-even point in dollars, and (c) the margin of safety in both dollar and percentage terms. 3-a. Calculate the unit sales per month at which Frieden management will be indifferent between doing the major upgrade to the manufacturing equipment and not doing the upgrade. 3-b. Based on the above analysis, should Frieden proceed with the major upgrade? Yes No 3-c. Why or why not