Multiple-Product Break-Even and Target Profit Vandenberg, Inc., produces and sells two products: a ceiling fan and a table fan. Vandenberg plans to sell 40,000 ceiling fans and 50,000 table fans in the coming year. Product price and cost information includes: Ceiling Fan Table Fan Price $60 $13 Unit variable cost $14 $7 Direct fixed cost $21,600 $46,000 Common fixed selling and administrative expenses total $74,000.
Multiple-Product Break-Even and Target Profit
Vandenberg, Inc., produces and sells two products: a ceiling fan and a table fan. Vandenberg plans to sell 40,000 ceiling fans and 50,000 table fans in the coming year. Product price and cost information includes:
| Ceiling Fan | Table Fan | ||||||
| Price | $60 | $13 | |||||
| Unit variable cost | $14 | $7 | |||||
| Direct fixed cost | $21,600 | $46,000 |
Common fixed selling and administrative expenses total $74,000.
Required:
2. Using the sales mix from Requirement 1, form a package of ceiling fans and table fans. How many ceiling fans and table fans are sold at break-even? Round your intermediate calculations and final answers to the nearest whole number.
| Break-even ceiling fans | |
| Break-even table fans |
3. Prepare a contribution-margin-based income statement for Vandenberg, Inc., based on the unit sales calculated in Requirement 2. If an amount is zero, enter "0". Enter any negative product margin and losses with a minus sign. Do not round intermediate calculations. Round your final answers to nearest dollar.
4. What if Vandenberg, Inc., wanted to earn operating income equal to $13,600? Calculate the number of ceiling fans and table fans that must be sold to earn this level of operating income. (Hint: Remember to form a package of ceiling fans and table fans based on the sales mix and to first calculate the number of packages to earn an operating income of $13,600.) Round your intermediate calculations and final answers to nearest number.
| Break-even ceiling fans | |
| Break-even table fans |
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