Analysis of Multiple Produc 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: Regular Model Deluxe Model Total Sales $13,500,000 $12,240,000 $25,740,000 Less: Variable costs 8,100,000 7,344,000 15,444,000 Contribution margin $5,400,000 $4,896,000 $10,296,000 Less: Direct fixed costs 1,200,000 960,000 2,160,000 Segment margin $4,200,000 $3,936,000 $8,136,000 Less: Common fixed costs 1,615,200 Operating income $6,520,800 Required: 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 X units 6,615 x 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 whole percentage.) Round the amount of revenue to the nearest dollar. Contribution margin ratio Revenue
Analysis of Multiple Produc 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: Regular Model Deluxe Model Total Sales $13,500,000 $12,240,000 $25,740,000 Less: Variable costs 8,100,000 7,344,000 15,444,000 Contribution margin $5,400,000 $4,896,000 $10,296,000 Less: Direct fixed costs 1,200,000 960,000 2,160,000 Segment margin $4,200,000 $3,936,000 $8,136,000 Less: Common fixed costs 1,615,200 Operating income $6,520,800 Required: 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 X units 6,615 x 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 whole percentage.) Round the amount of revenue to the nearest dollar. Contribution margin ratio Revenue
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![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:
Regular Model
Deluxe Model
Total
Sales
$13,500,000
$12,240,000
$25,740,000
Less: Variable costs
8,100,000
7,344,000
15,444,000
Contribution margin
$5,400,000
$4,896,000
$10,296,000
Less: Direct fixed costs
1,200,000
960,000
2,160,000
Segment margin
$4,200,000
$3,936,000
$8,136,000
Less: Common fixed costs
1,615,200
Operating income
$6,520,800
Required:
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
X units
Deluxe models
6,615 x units
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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff8f6f70b-e7a3-4b54-8cc5-6648a4d86850%2F4d6d99ce-dbfe-44fd-a64e-b79444367bea%2Fdn7ewxr_processed.jpeg&w=3840&q=75)
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:
Regular Model
Deluxe Model
Total
Sales
$13,500,000
$12,240,000
$25,740,000
Less: Variable costs
8,100,000
7,344,000
15,444,000
Contribution margin
$5,400,000
$4,896,000
$10,296,000
Less: Direct fixed costs
1,200,000
960,000
2,160,000
Segment margin
$4,200,000
$3,936,000
$8,136,000
Less: Common fixed costs
1,615,200
Operating income
$6,520,800
Required:
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
X units
Deluxe models
6,615 x units
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
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education