Answered step by step
Verified Expert Solution
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
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
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started