Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question 4 (15 marks) - Topic 10 Beautiful Furniture sells hand-crafted coffee tables. For the purposes of CVP analysis, the shop owner has divided sales

image text in transcribed

Question 4 (15 marks) - Topic 10 Beautiful Furniture sells hand-crafted coffee tables. For the purposes of CVP analysis, the shop owner has divided sales into two product categories, as follows: Product type Sales price Variable Product Cost Sales commission Mahogany tables $ 1 000 $550 $50 Pine tables 600 270 Sixty per cent of the shop's sales are pine tables. The shop's annual fixed costs are $150 500. (In the following requirements, ignore income taxes.) Required: Calculate the unit contribution margin for each product type. (4 marks) What is the shop's sales mix? (1 mark) Calculate the weighted average unit contribution margin, assuming a constant sales mix. (2 marks) What is the shop's break-even sales revenue in dollars? Assume a constant sales mix. (5 marks) How many tables of each type must be sold to earn a target net profit of $100 000? Assume a constant sales mix. (3 marks) SHOW YOUR WORKINGS (4 + 1 + 2 + 5 + 3 = 15 marks)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored 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

Using Microsoft Excel And Access 20 For Accounting

Authors: Glenn Owen

5th Edition

133751229X, 9781337512299

More Books

Students also viewed these Accounting questions

Question

develop ideas for a research project;

Answered: 1 week ago