Multiple-Product Break-even, Break-Even Sales RevenueCherry Blossom Products Inc. produces and sells yoga-training products: how-to DVDS and a basic equipment set (blocks, strap, and small pillows). Last year, CherryBlossom Products sold 13,500 DVDs and 4,500 equipment sets. Information on the two products is as follows:PriceDVDsEquipment Sets$8$25Variable cost per unitTotal fixed cost is $76,250.15Suppose that in the coming year, the company plans to produce an extra-thick yoga mat for sale to health clubs. The company estimates that 9,000 mats can be sold atprice of $17 and a variable cost per unit of $11. Total fixed cost must be increased by $25,410 (making total fixed cost $101,660). Assume that anticipated sales of theother products, as well as their prices and variable costs, remain the same.Part 1: Sales Mix Instructions and Part 2: Break-Even1. What is the sales mix of DVDs, equipment sets, and yoga mats?3:1122. Compute the break-even quantity of each product.Break-even DVDSBreak-even equipment setsunitsunitsunitsBreak-even yoga matsPart 3a: Income Statement3a. Prepare an income statement for Cherry Blossom Products for the coming year.Cherry Blossom Products Inc.Income StatementFor the Coming YearPart 3b: Contribution Margin Ratio and Part 4: Margin of Safety3b. What is the overall contribution margin ratio? Use the contribution margin ratio to compute overall break-even sales revenue. (Note: Round the contribution marginratio to the nearest whole percent; round the break-even sales revenue to the nearest dollar.)Overall contribution margin ratioOverall break-even sales revenue4. Compute the margin of safety for the coming year in sales dollars.

Sale mix = DVD (13,500):Equipment sets(4,500):Yoga mats(9,000) = 3:1:2

Answered: Part 3b Contribution Margin Ratio and…

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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4.3 Break-even analysis Consider the following data: Selling price $10 per unit Variable cost $6 per unit Fixed costs $1,000 How many units need to be sold to break even? 4.4 Profit targets Using the same data as in Question 4.3, if fixed costs rise by 20% and the company need to make a profit of $350, how many units need to be sold?
Question 5 ) Answer with Formulas
Contribution Margin Ratio, Break-Even Sales Revenue, Sales Revenue for Target Profit Schylar Pharmaceuticals, Inc., plans to sell 120,000 units of antibiotic at an average price of $25 each in the coming year. Total variable costs equal $960,000. Total fixed costs equal $7,200,000. Required: 1. What is the contribution margin per unit? Round your answer to the nearest cent. What is the contribution margin ratio? Round your answer to two decimal places. (Express as a decimal-based answer rather than a whole percent amount.) fill in the blank 2 2. Calculate the sales revenue needed to break even. Round your answer to the nearest dollar. 3. Calculate the sales revenue needed to achieve a target profit of $205,000. Round your answer to the nearest dollar. 4. What if the average price per unit increased to $26.50? Recalculate the following: a. Contribution margin per unit. Round your answer to the nearest cent. b. Contribution margin ratio. Enter your answer as a decimal value (not a…
Sometimes management prefers that the break-even point be expressed in sales dollars rather than units. This can be accomplished by using the contribution margin per unit Select one: O True O False
5
Contribution Margin Ratio, Break-Even Sales Revenue, Sales Revenue for Target Profit Schylar Pharmaceuticals, Inc., plans to sell 100,000 units of antibiotic at an average price of $15 each in the coming year. Total variable costs equal $480,000. Total fixed costs equal $8,400,000. 4. What if the average price per unit increased to $16.50? Recalculate the following: a. Contribution margin per unit. Round your answer to the nearest cent. b. Contribution margin ratio. Enter your answer as a decimal value (not a percentage), rounded to four decimal places.fill in the blank 6 c. Sales revenue needed to break even. In your computations, use your rounded answer from part (4-b) above for the contribution margin ratio, and round your final answer to the nearest dollar. d. Sales revenue needed to achieve a target profit of $260,000. In your computations, use your rounded answer from part (4-b) above for the contribution margin ratio, and round your final answer to the nearest dollar.
If sales volume increases and all other factors remain constant, then the: O contribution margin ratio will increase. O margin of safety will increase. break-even point will decrease. O net operating income will decrease.
10 Ritchie Manufacturing Company makes a product that it sells for $160 per unit. The company incurs variable manufacturing costs of $84 per unit. Variable selling expenses are $12 per unit, annual fixed manufacturing costs are $470,000, and fixed selling and administrative costs are $208,400 per year. Required Determine the break-even point in units and dollars using each of the following approaches: Skipped a. Use the equation method. b. Use the contribution margin per unit approach. c. Use the contribution margin ratio approach. d. Prepare a contribution margin income statement for the break-even sales volume.
Question 5A .
3. The result of the fixed expenses divided by the unit contribution margin refers to the: * Margin of safety Contribution margin ratio Break-even point in unit sales Break-even point in dollar sales None of the above 4. Which of the following statements is correct concerning the variable expenses per unit within the relevant range? * The variable expenses per unit remain constant as the activity changes The variable expenses per unit increase as the activity increases The variable expenses per unit decrease as the activity increases The variable expenses per unit can O increase or decrease as the activity changes
Claudia wants to perform a break-even analysis on her very busy casual-dining operation. She has obtained the following operating results from last month's income statement and POS system sales records: Guests served: Sales: Variable costs: Fixed costs: Total costs: Profit: 25,000 $210,000 $75,000 $110,000 $185,000 $25,000
estion 2: vin Question 1: a. Explain the meaning of breakeven point and the benefit of using it in businesses. b. Given the following information for SAMAR Company, answer the following questions: Selling price (per unit) Number of units sold Variable cost (per unit) Fixed cost i.Calculate contribution margin ratio ii.Find Breakeven Point in amount iii.Find Breakeven Point in units 240 R.O 700 R.O 130 R.O 560,000 R.O

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