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Lindstrom Company produces two fountain pen models. Information about its products follows: Product A Product B $130,000 Sales revenue Less: Variable costs Contribution margin Total units sold 54,600 $ 75,400 5,000 $180,000 52,200 $127,800 5,000 Lindstrom's fixed costs total $84,000. Required: 1. Determine Lindstrom's weighted-average unit contribution margin and weighted-average contribution margin ratio. 2. Calculate Lindstrom's break-even point in units and in sales revenue. 3. Calculate the number of units that Lindstrom must sell to earn a $120,000 profit. 4. Calculate Lindstrom's margin of safety and margin of safety as a percentage of sales if it sells 9,100 total pens.

Lindstrom Company produces two fountain pen models. Information about its products follows: Product A Product B $130,000 Sales revenue Less: Variable costs Contribution margin Total units sold 54,600 $ 75,400 5,000 $180,000 52,200 $127,800 5,000 Lindstrom's fixed costs total $84,000. Required: 1. Determine Lindstrom's weighted-average unit contribution margin and weighted-average contribution margin ratio. 2. Calculate Lindstrom's break-even point in units and in sales revenue. 3. Calculate the number of units that Lindstrom must sell to earn a $120,000 profit. 4. Calculate Lindstrom's margin of safety and margin of safety as a percentage of sales if it sells 9,100 total pens.

FINANCIAL ACCOUNTING
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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Lindstrom Company produces two fountain pen models. Information about its products follows: Product A Product B $180,000 $130,000 54,600 52,200 $ 75,400 5,000 $127,800 5,000 Sales revenue Less: Variable costs Contribution margin. Total units sold Lindstrom's fixed costs total $84,000. Required: 1. Determine Lindstrom's weighted-average unit contribution margin and weighted-average contribution margin ratio. 2. Calculate Lindstrom's break-even point in units and in sales revenue. 3. Calculate the number of units that Lindstrom must sell to earn a $120,000 profit. 4. Calculate Lindstrom's margin of safety and margin of safety as a percentage of sales if it sells 9,100 total pens. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Determine Lindstrom's weighted-average unit contribution margin and weighted-average contribution margin ratio. (Round your weighted-average CM to 2 decimal places and Weighted-Average CM Ratio to 1 decimal place (1.e. .123 should be entered as 12.3%)). Weighted-Average CM Weighted-Average CM Ratio per Unit % Required 1 Required 2 >
Transcribed Image Text:Lindstrom Company produces two fountain pen models. Information about its products follows: Product A Product B $180,000 $130,000 54,600 52,200 $ 75,400 5,000 $127,800 5,000 Sales revenue Less: Variable costs Contribution margin. Total units sold Lindstrom's fixed costs total $84,000. Required: 1. Determine Lindstrom's weighted-average unit contribution margin and weighted-average contribution margin ratio. 2. Calculate Lindstrom's break-even point in units and in sales revenue. 3. Calculate the number of units that Lindstrom must sell to earn a $120,000 profit. 4. Calculate Lindstrom's margin of safety and margin of safety as a percentage of sales if it sells 9,100 total pens. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Determine Lindstrom's weighted-average unit contribution margin and weighted-average contribution margin ratio. (Round your weighted-average CM to 2 decimal places and Weighted-Average CM Ratio to 1 decimal place (1.e. .123 should be entered as 12.3%)). Weighted-Average CM Weighted-Average CM Ratio per Unit % Required 1 Required 2 >
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