Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The StackpoleStackpole Company retails two products: a standard and a deluxe version of a luggage carrier. The budgeted income statement for next period is as
The StackpoleStackpole Company retails two products: a standard and a deluxe version of a luggage carrier. The budgeted income statement for next period is as follows:
LOADING... Click the icon to view the budgeted income statement.
Read the requirements LOADING...
Question content area bottom
Part
Requirement Compute the breakeven point in units, assuming that the company achieves its planned sales mix.
Begin by determining the sales mix. For every deluxe units sold,
standard units are sold.
Part
Determine the formula used to calculate the breakeven point when there is more than one product sold. Then, enter the amounts in the formula to calculate the breakeven point.
Part
Fixed costs
:
Breakeven point in bundles
:
Part
The breakeven point is
standard units and
deluxe units.
Part
Requirement Compute the breakeven point in unitsa if only standard carriers are sold andb if only deluxe carriers are sold.
Part
a If only standard carriers are sold, the breakeven point is
units.
b If only deluxe carriers are sold, the breakeven point is
units.
Part
Requirement Suppose comma units are sold but only comma of them are deluxe. Compute the operating income. Compute the breakeven point in units. Compare your answer with the answer to requirement What is the major lesson of this problem?
Compute the operating income if comma units are sold but only comma of them are deluxe.
Standard Carrier
Deluxe Carrier
Total
Units sold
Revenues at $ and $ per unit
Variable costs at $ and $ per unit
Contribution margin
Fixed costs
Operating income
Part
Before calculating the breakeven points, determine the new sales mix.
For every deluxe carrier sold,
standard carriers are sold.
Part
Compute the breakeven point in units, assuming the new sales mix. Round your answers up to the next whole number.
The breakeven point is
standard units and
deluxe units.
Part Data table
Compare your answer with the answer to requirement What is the major lesson of this problem?
The major lesson of this problem is that changes in the sales mix change
breakeven points and operating incomes
neither breakeven points nor operating incomes
only breakeven points
only operating incomes
In this example, the budgeted and actual total sales in number of units were identical, but the proportion of the product having the
higher
lower
contribution margin declined. Operating income
improved
stayed the same
suffered
and the breakeven point
fell
rose
stayed the same
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