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Required: a. Based on budgeted sales, determine the relative sales mix between the two products. b. Determine the weighted-average contribution margin per unit. c. Calculate the break-even point in total number of units. d. Determine the number of units of each product Finch must sell to break even. e. Verify the break-even point by completing the following income statement. f. Determine the margin of safety based on the combined sales of the two products.

Required: a. Based on budgeted sales, determine the relative sales mix between the two products. b. Determine the weighted-average contribution margin per unit. c. Calculate the break-even point in total number of units. d. Determine the number of units of each product Finch must sell to break even. e. Verify the break-even point by completing the following income statement. f. Determine the margin of safety based on the combined sales of the two products.

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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Finch Company produces two products. Budgeted annual income statements for the two products are provided as follows. Sales Variable cost Contribution margin Fixed cost Net income Budgeted Number 300 Required A 300 300 Required B Required sales for Power Required sales for Lite Power Per Unit @$580 @320 @260 Required C Complete this question by entering your answers in the tabs below. Required: a. Based on budgeted sales, determine the relative sales mix between the two products. b. Determine the weighted-average contribution margin per unit. c. Calculate the break-even point in total number of units. d. Determine the number of units of each product Finch must sell to break even. e. Verify the break-even point by completing the following Income statement. f. Determine the margin of safety based on the combined sales of the two products. Budgeted Amount = $174,000 Required D = (96,000) = 78,000 (14,000) $64,000 units units Budgeted Number 700 < Required C 708 700 Required E Determine the number of units of each product Finch must sell to break even. Required F Lite Per Unit @ $530 @410 @120 Required E > Budgeted Amount = $371,000 = (287,000) = 84,000 (75,100) $8,900 Budgeted Number 1,000 1,000 1,000 Total Budgeted Amount $545,000 (383,000) 162,000 (89,100) $72,908
Transcribed Image Text:Finch Company produces two products. Budgeted annual income statements for the two products are provided as follows. Sales Variable cost Contribution margin Fixed cost Net income Budgeted Number 300 Required A 300 300 Required B Required sales for Power Required sales for Lite Power Per Unit @$580 @320 @260 Required C Complete this question by entering your answers in the tabs below. Required: a. Based on budgeted sales, determine the relative sales mix between the two products. b. Determine the weighted-average contribution margin per unit. c. Calculate the break-even point in total number of units. d. Determine the number of units of each product Finch must sell to break even. e. Verify the break-even point by completing the following Income statement. f. Determine the margin of safety based on the combined sales of the two products. Budgeted Amount = $174,000 Required D = (96,000) = 78,000 (14,000) $64,000 units units Budgeted Number 700 < Required C 708 700 Required E Determine the number of units of each product Finch must sell to break even. Required F Lite Per Unit @ $530 @410 @120 Required E > Budgeted Amount = $371,000 = (287,000) = 84,000 (75,100) $8,900 Budgeted Number 1,000 1,000 1,000 Total Budgeted Amount $545,000 (383,000) 162,000 (89,100) $72,908
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