Question
Sales Mix (Product Mix) Q1: in sales mix analysis what is the impact on net operating income if the company tend to focus on low
Sales Mix (Product Mix)
Q1: in sales mix analysis what is the impact on net operating income if the company tend to focus on low contribution margin products (give example).
Q1: Stuffed Animals, Inc. has decided to focus strictly on producing and selling one type of teddy bear. For the upcoming year, Stuffed Animals, Inc. hopes to make a 25% profit on sales. Fixed costs are set at $51,000, and variable costs are $9.50 per unit. If teddy bears are sold at $15 each, how many bears must be sold to meet the profit goal?
Q2: The following monthly budgeted data are available for a wholesale company:
| Product A | Product B | Product C |
Sales | $800,000 | $400,000 | $200,000 |
Variable expenses | 640,000 | 240,000 | 140,000 |
Contribution margin | $160,000 | $160,000 | $ 60,000 |
The budgeted total fixed expense is $ 150,000. Required:
a) Calculate the break-even sales for the month?
b) Calculate the margin of safety in sales dollars?
c) What is the sales Mix?
Q3: CVP analysis assumes that costs can be accurate-
ly divided into fixed and variable categories. Do
you agree? Explain.
Use the following information to answer questions 3-
18 to 3-20.
You are given the following details regarding the
operations of Cheng Hi Fried Rice
Restaurant.
Fixed costs
60.000
Selling price of 6.00
a plate of fried
rice
Variable costs
4.00
per plate of
fried rice
3-18 What is the contribution margin percentage per
plate of fried rice?
a. 2
b. 50%
c. 33.33%
d. 66.67%
3-19 Sales volume next year is anticipated to be
50,000 plates of fried rice. By what percentage would
the selling price have to be changed to generate a net
income of 75,000, assume corporate tax is 25%, all
other things remaining the same?
a. +20%
b. -46.67%
c. 0%
d. +12%
3-20 Calculate the breakeven point in both units and
sales value
a. 30,000 plates of fried rice and 60,000
b. 180,000 plates of fried rice and 80,000
c. 10,000 plates of fried rice and 180,000
d. 30,000 plates of fried rice and 180,000
3-42 CVP, sensitivity analysis. Mondial Nails pro-
duces a famous nail polish with a unique glossy feature and sells it for $25 per unit. The operating income
for 2017 is as follows:
Sales revenue
Raw materials
Variable manufacturing -
costs
Other variable
costs
Contribution
margin
Fixed cost
Operating in-
come
Per
unit
25
5
4
Total
750,000
150.000
120.000
6
180,000
10
300,000
174.000
126.000
Mundial Nails would like to increase its profitability
over the next year by at least 20%. To do so, the com-
pany is considering the following options:
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