Alo 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, Alo expects to sell 90,000 regular models and 18,000 deluxe models. A segmented income statement for the two products is a follows: Sales Less: Variable costs Contribution margin Less: Direct fixed costs Segment margin Less: Common fixed costs Operating income Required: Regular Model $14,400,000 8,640,000 $5,760,000 1,200,000 $4,560,000 Show Transcribed Text Contribution margin ratio Revenue Deluxe Model $12,240,000 7,344,000 $4,896,000 960,000 $3,936,000 Total $26,640,000 15,984,000 $10,656,000 2,160,000 $8,496,000 1,628,800 $6,867,200 1. Compute the number of regular models and deluxe models that must be sold to break even. Round your answers to the nearest whole unit. Regular models units units Deluxe models 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. Round the contribution margin ratio to four decimal places. Use the rounded value in the subsequent computation. (Express as a decimal-based amount rather than a who percentage.) Round the amount of revenue to the nearest dollar.
Alo 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, Alo expects to sell 90,000 regular models and 18,000 deluxe models. A segmented income statement for the two products is a follows: Sales Less: Variable costs Contribution margin Less: Direct fixed costs Segment margin Less: Common fixed costs Operating income Required: Regular Model $14,400,000 8,640,000 $5,760,000 1,200,000 $4,560,000 Show Transcribed Text Contribution margin ratio Revenue Deluxe Model $12,240,000 7,344,000 $4,896,000 960,000 $3,936,000 Total $26,640,000 15,984,000 $10,656,000 2,160,000 $8,496,000 1,628,800 $6,867,200 1. Compute the number of regular models and deluxe models that must be sold to break even. Round your answers to the nearest whole unit. Regular models units units Deluxe models 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. Round the contribution margin ratio to four decimal places. Use the rounded value in the subsequent computation. (Express as a decimal-based amount rather than a who percentage.) Round the amount of revenue to the nearest dollar.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:CVP Analysis of Multiple Products
Alo 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, Alo expects to sell 90,000 regular models and 18,000 deluxe models. A segmented income statement for the two products is as
follows:
Sales
Less: Variable costs
Contribution margin
Less: Direct fixed costs
Segment margin
Less: Common fixed costs
Operating income
Required:
Regular Model
$14,400,000
8,640,000
$5,760,000
1,200,000
$4,560,000
Show Transcribed Text
units
Deluxe Model
units
$12,240,000
7,344,000
$4,896,000
960,000
$3,936,000
Total
$26,640,000
15,984,000
$10,656,000
2,160,000
$8,496,000
1,628,800
$6,867,200
V
1. Compute the number of regular models and deluxe models that must be sold to break even. Round your answers to the nearest whole unit.
Regular models
Deluxe models
C
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. Round the
contribution margin ratio to four decimal places. Use the rounded value in the subsequent computation. (Express as a decimal-based amount rather than a whole
percentage.) Round the amount of revenue to the nearest dollar.
Contribution margin ratio
Revenue
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