Linburgh Inc manufactures model airplanes and repair kits. The planes account for 80% of thesales mix, and the kits the remainder. The variable cost ratio for the planes is 85% and 70% forthe kits. Fixed costs are $99,000. Compute the breakeven point in sales dollars.O $825,000$550,000$1,222,222$293,333hp

Compute total contribution margin using sales mix for the two products as shown below:

Answered: Linburgh Inc manufactures model…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Zeta Company sells a single product with a selling price of $300 per unit. Per unit variable costs are $82.00 and total fixed costs are $127,500. The number of units Zeta needs to sell to achieve its target profit of $50,000 is closest to: 610 814 a. b. C. d. 1,555 2,165
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International Printer Machines (IPM) builds three computer printer models: Alpha, Beta, and Gamma. Information for these three products is as follows: Alpha Beta Gamma Total Selling price per unit $250 $400 $1,500 Variable cost per unit $80 $200 $800 Expected unit sales (annual) 12,000 6,000 2,000 20,000 Sales mix 50 percent 40 percent 10 percent 100 percent Total annual fixed costs are $5,000,000. Assume the sales mix remains the same at all levels of sales. Required: a) Calculate the weighted average unit contribution margin, assuming a constant sales mix. b) How many units of each printer must be sold to break even? c) i) Explain what is margin of safety ii) Calculate in sales units the margin of safety for IPM, assuming projected sales are 25,000 units? SHOW YOUR WORKING
International Printer Machines (IPM) builds three computer printer models: Alpha, Beta, andGamma. Information for these three products is as follows:Alpha Beta Gamma TotalSelling price per unit $250 $400 $1 500Variable cost per unit $80 $200 $800Expected unit sales (annual) 12,000 6,000 2,000 20,000Sales mix 50 percent 40 percent 10 percent 100 percentTotal annual fixed costs are $5,000,000. Assume the sales mix remains the same at all levelsof sales.Required:a) Calculate the weighted average unit contribution margin, assuming a constant sales mix. b) How many units of each printer must be sold to break even? (3 marks)c) i) Explain what is margin of safety ii) Calculate in sales units the margin of safety for IPM, assuming projected sales are25,000 units?

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