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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 Segment margin 1,200,000 960,000 2,160,000 $4,200,000 $3,936,000 $8,136,000 Less: Common fixed costs 1,729,600 $6,406,400 Operating income 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 Deluxe models 34,000 units 6,800 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 0.4 Revenue

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 Segment margin 1,200,000 960,000 2,160,000 $4,200,000 $3,936,000 $8,136,000 Less: Common fixed costs 1,729,600 $6,406,400 Operating income 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 Deluxe models 34,000 units 6,800 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 0.4 Revenue

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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 Segment margin 1,200,000 960,000 2,160,000 $4,200,000 $3,936,000 $8,136,000 Less: Common fixed costs 1,729,600 $6,406,400 Operating income 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 Deluxe models 34,000 units 6,800 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 0.4 Revenue
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 Segment margin 1,200,000 960,000 2,160,000 $4,200,000 $3,936,000 $8,136,000 Less: Common fixed costs 1,729,600 $6,406,400 Operating income 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 Deluxe models 34,000 units 6,800 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 0.4 Revenue
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