Thornton Company produces two products. Budgeted annual income statements for the two products are provided as follows.

	Power										Lite										Total
	Budgeted	Per					Budgeted				Budgeted	Per					Budgeted				Budgeted	Budgeted
	Number	Unit					Amount				Number	Unit					Amount				Number	Amount
Sales	230	@	$	780		=	$	179,400			920	@	$	620		=	$	570,400			1,150	$	749,800
Variable cost	230	@		490		=		(112,700	)		920	@		400		=		(368,000	)		1,150		(480,700	)
Contribution margin	230	@		290		=		66,700			920	@		220		=		202,400			1,150		269,100
Fixed cost								(13,000	)									(139,100	)				(152,100	)
Net income							$	53,700									$	63,300				$	117,000

Required:

1. Based on budgeted sales, determine the relative sales mix between the two products.

2. Determine the weighted-average contribution margin per unit.

3. Calculate the break-even point in total number of units.

4. Determine the number of units of each product Thornton must sell to break even.

5. Verify the break-even point by preparing an income statement for each product as well as an income statement for the combined products.

6. Determine the margin of safety based on the combined sales of the two products.

Required A Required B Required C Required D Required E Required F Based on budgeted sales, determine the relative sales mix between the two products. 20 % Relative percentage for Power Relative percentage for Lite 80 % Required A Required B Required C Required D Required E Required F Determine the weighted average contribution margin per unit. Weighted average contribution margin per unit $ 236 X Required A Required B Required C Required D Required E Required F Calculate the break-even point in total number of units. Break-even point 645 x units Required A Required B Required C Required D Required E Required F Determine the number of units of each product Thornton must sell to break even. 129 X units Required sales for Power Required sales for Lite 516 X units Required A Required B Required C Required D Required E Required F Verify the break-even point by preparing an income statement for each product as well as an income statement for the combined products. Power Lite Total Sales $ 100,620 X $ 319,920 X $ 420,540 X 63,210 x 206,400 X 269,610 X Variable costs Contribution margin Fixed cost $ 37,410 X $ 113,520 X 150,930 X 13,000 139,100 (25,580) X 152, 100 (1,170) X Net income (Loss) $ 24,410 Required A Required B Required C Required D Required E Required F Determine the margin of safety based on the combined sales of the two products. (Round your answer to 1 decimal place. (i.e., 0.234 should be entered as 23.4)) Margin of safety 43.9 X %