Compute the number of regular models and deluxe models

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Question - Steinberg Company produces commercial printers. One is the regular model, a basic model that is designed to copy and print in black and white. Another model, the deluxe model, is a color printer-scanner-copier. For the coming year, Steinberg expects to sell 90,000 regular models and 18,000 deluxe models. A segmented income statement for the two products is as follows:

 

Regular Model

Deluxe Model

Total

Sales

$13,500,000

$12,150,000

$25,650,000

Less: Variable costs

9,000,000

7,290,000

16,290,000

Contribution margin

$4,500,000

$4,860,000

$9,360,000

Less: Direct fixed costs

1,200,000

960,000

2,160,000

Segment margin

$3,300,000

$3,900,000

$7,200,000

Less: Common fixed costs

 

 

1,280,000

Operating income

 

 

$5,920,000

Required -

1. Compute the number of regular models and deluxe models that must be sold to break even.

2. Using information only from the total column of the income statement, compute the sales revenue that must be generated for the company to break even.

Reference no: EM132432272

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