Question
The Blanket Company (TBC) manufactures two types of blankets. One is made of nylon. The other is made of wool. The budgeted per-unit contribution margin
The Blanket Company (TBC) manufactures two types of blankets. One is made of nylon. The other is made of wool. The budgeted per-unit contribution margin for each product follows.
NylonWoolSales price$ 156$ 208Variable cost per unit(86)(98)Contribution margin per unit$ 70$ 110TBC expects to incur annual fixed costs of $816,000. The relative sales mix of the products is 80 percent for Nylon and 20 percent for Wool.
Required
Determine the total number of products (units of Nylon and Wool combined) TBC must sell to earn a $120,000 profit.
How many units each of Nylon and Wool blankets must TBC sell to earn a $120,000 profit?
Prepare an income statement using the contribution margin format.
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