Business, 05.08.2020 02:01 eldiamonte

Sales mix, three products. The Ronowski Company has three product lines of belts—A, B, and C— with contribution margins of $3, $2, and $1, respectively. The president foresees sales of 200,000 units in the coming period, consisting of 20,000 units of A, 100,000 units of B, and 80,000 units of C. The company’s fixed costs for the period are $255,000. What is the company’s breakeven point in units, assuming that the given sales mix is maintained?
If the sales mix is maintained, what is the total contribution margin when 200,000 units are sold? What is the operating income?
What would operating income be if 20,000 units of A, 80,000 units of B, and 100,000 units of C were sold? What is the new breakeven point in units if these relationships persist in the next period?

Answers: 3

Show answers

Answers

Answer from: lanman65

1. 13,236 units

2. $85,000

3. $65,000

4. 15,938 units

Explanation:

First Determine the ratio of the sales mix as follows :

Ratio = 20,000 : 100,000 : 80,000

Reduced to lowest term = 1 : 5 : 4

Then find the Company`s break-even point using the sales mix as follows ;

Break-even point (units) = Fixed Costs ÷ Contribution Margin as per sales mix

= $255,000 ÷ ($3 × 1 + $2 × 5 + $1 × 4)

= $255,000 ÷ $17

= 13,235.29 or 13,236 units

Calculation of Operating Income assuming 200,000 units are sold

Contribution :

A : (1/10 × 200,000 units) × $3 = $60,000

B : (5/10 × 200,000 units) × $2 = $200,000

C : (4/10 × 200,000 units) × $1 = $80,000

Total Contribution $340,000

Less Fixed Cost ($255,000)

Operating Income $85,000

Calculation of Operating Income if 20,000 units of A, 80,000 units of B, and 100,000 units of C were sold.

Contribution :

A : 20,000 units × $3 = $60,000

B : 80,000 units × $2 = $160,000

C : 100,000 units × $1 = $100,000

Total Contribution $320,000

Less Fixed Cost ($255,000)

Operating Income $65,000

Determination of New Sales Mix :

Ratio = 20,000 : 80,000 : 100,000

Reduced to Lowest Term = 1 : 4 : 5

Break-even point (units) = Fixed Costs ÷ Contribution Margin as per sales mix

= $255,000 ÷ ($3 × 1 + $2 × 4 + $1 × 5)

= $255,000 ÷ $16

= 15,937.5 or 15,938 units

Answer from: Quest

Answernafta/// (true) it allows a member country to reimpose tariffs if imports are hurting that country's economy or its workers;

Answer from: Quest

Owners, investors and venture capitalists want to recoup their money .

Another question on Business

Business, 22.06.2019 03:30

He aldermanalderman company has prepared a sales budget of 42 comma 00042,000 finished units for a 3-month period. the company has an inventory of 10 comma 00010,000 units of finished goods on hand at december 31 and has a target finished goods inventory of 11 comma 00011,000 units at the end of the succeeding quarter. it takes 44 gallons of direct materials to make one unit of finished product. the company has inventory of 64 comma 00064,000 gallons of direct materials at december 31 and has a target ending inventory of 53 comma 00053,000 gallons at the end of the succeeding quarter. how many gallons of direct materials should aldermanalderman company purchase during the 3 months ending march 31? select the labels and enter the amounts to calculate the direct materials (gallons) to be purchased.

Answers: 3

Answer

Business, 22.06.2019 06:30

Selected data for stick’s design are given as of december 31, year 1 and year 2 (rounded to the nearest hundredth). year 2 year 1 net credit sales $25,000 $30,000 cost of goods sold 16,000 18,000 net income 2,000 2,800 cash 5,000 900 accounts receivable 3,000 2,000 inventory 2,000 3,600 current liabilities 6,000 5,000 compute the following: 1. current ratio for year 2 2. acid-test ratio for year 2 3. accounts receivable turnover for year 2 4. average collection period for year 2 5. inventory turnover for year 2

Answers: 2

Answer

Business, 22.06.2019 11:00

%of the world's population controls approximately % of the world's finances (the sum of gross domestic products)" quizlket

Answers: 1

Answer

Business, 22.06.2019 14:50

Pear co.’s income statement for the year ended december 31, as prepared by pear’s controller, reported income before taxes of $125,000. the auditor questioned the following amounts that had been included in income before taxes: equity in earnings of cinn co. $ 40,000 dividends received from cinn 8,000 adjustments to profits of prior years for arithmetical errors in depreciation (35,000) pear owns 40% of cinn’s common stock, and no acquisition differentials are relevant. pear’s december 31 income statement should report income before taxes of

Answers: 3

Answer

You know the right answer?

Sales mix, three products. The Ronowski Company has three product lines of belts—A, B, and C— with c...

Questions