Reference no: EM133085572
Question - Multiple-Product Break-Even and Target Profit - Vandenberg, Inc., produces and sells two products: a ceiling fan and a table fan. Vandenberg plans to sell 30,000 ceiling fans and 70,000 table fans in the coming year. Product price and cost information include:
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Ceiling Fan
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Table Fan
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|
Price
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$56
|
$15
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Unit variable cost
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$13
|
$5
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Direct fixed cost
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$24,000
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$49,000
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Common fixed selling and administrative expenses total $76,000.
Required -
1. What is the sales mix estimated for next year (calculated to the lowest whole number for each product)?
2. Using the sales mix from Requirement 1, form a package of ceiling fans and table fans. How many ceiling fans and table fans are sold at break-even?
3. Prepare a contribution-margin-based income statement for Vandenberg, Inc., based on the unit sales calculated in Requirement 2. If an amount is zero, enter "0". Enter any negative product margin and losses with a minus sign. Do not round intermediate calculations. Round your final answers to the nearest dollar.
4. What if Vandenberg, Inc., wanted to earn an operating income equal to $12,400? Calculate the number of ceiling fans and table fans that must be sold to earn this level of operating income. (Hint: Remember to form a package of ceiling fans and table fans based on the sales mix and to first calculate the number of packages to earn an operating income of $12,400.) Round your intermediate calculations and final answers to the nearest number.