Total fixed expenses are $257,000 per year All three products are sold in highly competitive markets, so the company is unable to raise its prices without losing unacceptable numbers of customers The company has an extremely effective lean production system, so there are no beginning or ending work in process or finished goods inventories Case 5 32 Break Evens for Individual Products in a Multiproduct Company LO 5 5, LO 5 9 Cheryl Montoya picked up the phone and called her boss, Wes Chan, the vice president of marketing at Piedmont Fasteners Corporation Wes, Im not sure how to go about answering the questions that came up at the meeting with the president yesterday What's the problem The president wanted to know the break even point for each of the companys products, but I am having trouble figuring them out Im sure you can handle it, Cheryl And, by the way, I need your analysis on my desk tomorrow morning at 8 00 sharp in time for the follow up meeting at 9 00 Piedmont Fasteners Corporation makes three different clothing fasteners in its manufacturing facility in North Carolina Data concerning these products appear below Velcro Metal Nylon Normal annual sales volume 117,000 191,000 289,000 Unit selling price $2 00 $1 50 $1 10 Variable expense per unit $ 80 $ 70 $ 90 Total fixed expenses are $257,000 per year All three products are sold in highly competitive markets, so the company is unable to raise its prices without losing unacceptable numbers of customers The company has an extremely effective lean production system, so there are no beginning or ending work in process or finished goods inventories Required 1 What is the companys over all break even point in dollar sales (Round CM ratio to 4 decimal places and final answer to the nearest whole dollar ) 2 Of the total fixed expenses of $257,000, $35,280 could be avoided if the Velcro product is dropped, $136,800 if the Metal product is dropped, and $40,400 if the Nylon product is dropped The remaining fixed expenses of $44,520 consist of common fixed expenses such as administrative salaries and rent on the factory building that could be avoided only by going out of business entirely a What is the break even point in unit sales for each product (Do not round intermediate calculations ) b If the company sells exactly the break even quantity of each product, what will be the overall profit of the company (Do not round intermediate calculations )

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Total fixed expenses are $257,000 per year. All three products are sold in highly competitive markets, so the company is unable to raise its prices

Total fixed expenses are $257,000 per year.

All three products are sold in highly competitive markets, so the company is unable to raise its prices without losing unacceptable numbers of customers.

The company has an extremely effective lean production system, so there are no beginning or ending work in process or finished goods inventories.

Case 5-32 Break-Evens for Individual Products in a Multiproduct Company [LO 5-5, LO 5-9]

Cheryl Montoya picked up the phone and called her boss, Wes Chan, the vice president of marketing at Piedmont Fasteners Corporation: Wes, Im not sure how to go about answering the questions that came up at the meeting with the president yesterday.

"What's the problem?"

The president wanted to know the break-even point for each of the companys products, but I am having trouble figuring them out.

Im sure you can handle it, Cheryl. And, by the way, I need your analysis on my desk tomorrow morning at 8:00 sharp in time for the follow-up meeting at 9:00.

Piedmont Fasteners Corporation makes three different clothing fasteners in its manufacturing facility in North Carolina. Data concerning these products appear below:

Velcro	Metal	Nylon
Normal annual sales volume	117,000	191,000	289,000
Unit selling price	$2.00	$1.50	$1.10
Variable expense per unit	$.80	$.70	$.90

Total fixed expenses are $257,000 per year.

All three products are sold in highly competitive markets, so the company is unable to raise its prices without losing unacceptable numbers of customers.

The company has an extremely effective lean production system, so there are no beginning or ending work in process or finished goods inventories.

Required:
1.	What is the companys over-all break-even point in dollar sales?(Round CM ratio to 4 decimal places and final answer to the nearest whole dollar.)

Of the total fixed expenses of $257,000, $35,280 could be avoided if the Velcro product is dropped, $136,800 if the Metal product is dropped, and $40,400 if the Nylon product is dropped. The remaining fixed expenses of $44,520 consist of common fixed expenses such as administrative salaries and rent on the factory building that could be avoided only by going out of business entirely.

a.	What is the break-even point in unit sales for each product?(Do not round intermediate calculations.)

b.	If the company sells exactly the break-even quantity of each product, what will be the overall profit of the company?(Do not round intermediate calculations.)