Using a Computer Spreadsheet to Solve Multiple-Product Break-Even: Varying Sales Mix

More-Power Company has projected sales of 75,000 regular sanders and 30,000 mini-sanders for next year. The projected income statement is as follows:

		Regular Sander		Mini-Sander		Total
Sales		$3,000,000		$1,800,000		$4,800,000
Less: Variable expenses		1,800,000		900,000		2,700,000
Contribution margin		$1,200,000		$900,000		$2,100,000
Less: Direct fixed expenses		250,000		450,000		700,000
Product margin		$950,000		$450,000		$1,400,000
Less: Common fixed expenses						600,000
Operating income						$800,000

Required:

1. For each of the following possible sales mixes, calculate operating income:

	Regular Sander	Mini-Sander
a.	75,000	37,500
b.	60,000	60,000
c.	30,000	90,000
d.	30,000	60,000

	Operating Income
a.	$fill in the blank 1
b.	$fill in the blank 2
c.	$fill in the blank 3
d.	$fill in the blank 4

2. Calculate the break-even units for each product for each of the preceding sales mixes. Round the number of break-even packages to two decimal places (and use this figure for intermediate calculations). Round the number of break-even regular and mini-sanders to the nearest whole unit.

	a	b	c	d
Break-even packages	fill in the blank 5	fill in the blank 6	fill in the blank 7	fill in the blank 8
Break-even regular sanders	fill in the blank 9	fill in the blank 10	fill in the blank 11	fill in the blank 12
Break-even mini-sanders	fill in the blank 13	fill in the blank 14	fill in the blank 15	fill in the blank 16