**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 30,000 ceiling fans and 60,000 table fans in the coming year. Product price and cost information includes:| | Ceiling Fan | Table Fan ||---------------------|-------------|-----------|| **Price** | $50 | $16 || **Unit variable cost** | $11 | $4 || **Direct fixed cost** | $23,000 | $42,000 |Common fixed selling and administrative expenses total $78,000.**Required:**1. What is the sales mix estimated for next year (calculated to the lowest whole number for each product)? Sales mix of ceiling fans to table fans = [ ] X : [ ] X2. 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: [ ] **Instructions for Vandenberg, Inc.’s Contribution-Margin Income Statement****Objective:** Prepare a contribution-margin-based income statement for Vandenberg, Inc. for the coming year. Base this on unit sales calculated in Requirement 2. If an amount is zero, enter "0." For any negative product margin and losses, use a minus sign. Avoid rounding intermediate calculations and round final answers to the nearest dollar.**Vandenberg, Inc.****Contribution-Margin-Income Statement****For the Coming Year**| | Ceiling Fans | Table Fans | Total ||---------------------------|--------------|------------|--------|| **Sales** | $ | $ | $ || **Variable Costs** | $ | $ | $ || **Contribution Margin** | $ | $ | $ || **Fixed Costs** | $ | | || **Net Income** | | | $ |**Structure of Income Statement:**- **Sales:** Enter the sales revenue for ceiling fans, table fans, and the total.- **Variable Costs:** Input the variable costs associated with ceiling fans, table fans, and compute the total.- **Contribution Margin:** Calculate the contribution margin by subtracting variable costs from sales for each product and total.- **Fixed Costs:** Deduct fixed costs from the total contribution margin to determine the net income.- **Net Income:** The net income is calculated by subtracting fixed costs from the total contribution margin. **Note:** Complete all fields, ensuring to adjust for any negative values, and round final totals to the nearest dollar as instructed.

1. Sales mix of ceiling fans to table fans = 30000:60000 = 1:2 2. Calculation of Breakeven point…

Answered: Multiple-Product Break-Even and Target…

Business

Accounting

Multiple-Product Break-Even and Target Profit

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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Question

100%

**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 30,000 ceiling fans and 60,000 table fans in the coming year. Product price and cost information includes:

| | Ceiling Fan | Table Fan |
|---------------------|-------------|-----------|
| **Price** | $50 | $16 |
| **Unit variable cost** | $11 | $4 |
| **Direct fixed cost** | $23,000 | $42,000 |

Common fixed selling and administrative expenses total $78,000.

**Required:**

1. What is the sales mix estimated for next year (calculated to the lowest whole number for each product)?
Sales mix of ceiling fans to table fans = [ ] X : [ ] X

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: [ ]

**Instructions for Vandenberg, Inc.’s Contribution-Margin Income Statement**

**Objective:** Prepare a contribution-margin-based income statement for Vandenberg, Inc. for the coming year. Base this on unit sales calculated in Requirement 2. If an amount is zero, enter "0." For any negative product margin and losses, use a minus sign. Avoid rounding intermediate calculations and round final answers to the nearest dollar.

**Vandenberg, Inc.**

**Contribution-Margin-Income Statement**

**For the Coming Year**

| | Ceiling Fans | Table Fans | Total |
|---------------------------|--------------|------------|--------|
| **Sales** | $ | $ | $ |
| **Variable Costs** | $ | $ | $ |
| **Contribution Margin** | $ | $ | $ |
| **Fixed Costs** | $ | | |
| **Net Income** | | | $ |

**Structure of Income Statement:**

- **Sales:** Enter the sales revenue for ceiling fans, table fans, and the total.
- **Variable Costs:** Input the variable costs associated with ceiling fans, table fans, and compute the total.
- **Contribution Margin:** Calculate the contribution margin by subtracting variable costs from sales for each product and total.
- **Fixed Costs:** Deduct fixed costs from the total contribution margin to determine the net income.
- **Net Income:** The net income is calculated by subtracting fixed costs from the total contribution margin.

**Note:** Complete all fields, ensuring to adjust for any negative values, and round final totals to the nearest dollar as instructed.

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