Question
Smithen Company, a wholesale distributor, has been operating for only a few months. The company sells three productssinks, mirrors, and vanities. Budgeted sales by product
Smithen Company, a wholesale distributor, has been operating for only a few months. The company sells three productssinks, mirrors, and vanities. Budgeted sales by product and in total for the coming month are shown below based on planned unit sales as follows:
UnitsPercentageSinks60050%Mirrors30025%Vanities30025%Total1,200100%
ProductSinksMirrorsVanitiesTotalPercentage of total sales44%20%36%100%Sales$253,460.00100%$116,000100%$210,540.00100%$580,000.00100%Variable expenses76,038.0030%92,80080%84,216.0040%253,054.0044%Contribution margin$177,422.0070%$23,20020%$126,324.0060%326,946.0056%Contribution margin per unit$295.70$77.33$421.08Fixed expenses289,520.00Operating income$37,426.00
Break-even point in sales dollars=Fixed expenses=$289,520=$517,000Overall CM ratio0.56
Break-even point in unit sales:
Total Fixed expenses$289,520== 1,062.63 unitsWeighted-average CM per unit$272.46**($295.70 0.50) + ($77.33 0.25) + ($421.08 0.25)
Assume that actual sales for the month total $669,155 (1,400 units), with the CM ratio and per unit amounts the same as budgeted. Actual fixed expenses are the same as budgeted, $289,520. Actual sales by product are as follows: sinks, $206,992 (490 units); mirrors, $216,533 (560 units); and vanities, $245,630 (350 units).
Required:
1.Prepare contribution format income statement for the month based on actual sales data.(Round your percentage answers to the nearest whole number.)
2.Compute the break-even point in sales dollars for the month, based on the actual data.(Round your intermediate calculations to the nearest whole percent. Round your final answer to the nearest whole dollar.)
3.Calculate the break-even point in unit sales for the month, based on the actual data.(Round your final answer to the nearest whole number.)
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