Problem 5: Break-Even Point and Target Profit Measured in Units (Multiple Products).Sports Products, Inc., produces three different toy footballs with the following annual data:

	Glow	Basic	Extreme	Total
Selling price per unit	$10	$4	$12
Variable cost per unit	$3	$1	$3
Expected unit sales	8,000	10,000	22,000	40,000
Sales mix	20 percent	25 percent	55 percent	100 percent
Fixed costs				$205,900

Assume the sales mix remains the same at all levels of sales.

Required:

(Round all answers to the nearest cent and nearest unit where appropriate.)

1. Calculate the weighted average contribution margin per unit.
2. How many units in total must be sold to break even?
3. How many units of each product must be sold to break even?
4. How many units in total must be sold to earn an annual profit of $200,000?
5. How many units of each product must be sold to earn an annual profit of $200,000?

Problem 6: Break-Even Point and Target Profit Measured in Sales Dollars (Multiple Products).Sports Products, Inc., produces three different toy footballs with the following annual data (these data are the same as the previous exercise):

	Glow	Basic	Extreme	Total
Selling price per unit	$10	$4	$12
Variable cost per unit	$3	$1	$3
Expected unit sales	8,000	10,000	22,000	40,000
Sales mix	20 percent	25 percent	55 percent	100 percent
Fixed costs				$205,900

Assume the sales mix remains the same at all levels of sales.

Required:

Round your answers to the nearest hundredth of a percent and nearest dollar where appropriate. (An example for percentage calculations is 0.434532 = 0.4345 = 43.45 percent; an example for dollar calculations is $378.9787 = $379.)

1. Using the information provided, make a contribution margin income statement
2. Calculate the weighted average contribution margin ratio.
3. Find the break-even point in sales dollars.
4. What amount of sales dollars is required to earn an annual profit of $500,000?
5. Assume the contribution margin income statement prepared in requirementais the company's base case. What is the margin of safety in sales dollars?