Rooney Company produces two products. Budgeted annual income statements for the two products are provided as follows. Power Lite Total Budgeted Per Budgeted Budgeted Per Budgeted Budgeted Budgeted Number Unit Number Unit Number Amount $ 487,200 (259,200) 228,000 (114,000) Amount Amount @ $ 700 @ 380 = @ 320 = = $168,000 (91,200) $ 319,200 (168,000) 151,200 Sales 240 560 @ $ 570 800 Variable cost 240 560 300 = 800 Contribution margin 240 76,800 560 270 = 800 Fixed cost |(19,000) (95,000) Net income $ 57,800 $ 56,200 $ 114,000

Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter9: Profit Planning And Flexible Budgets
Section: Chapter Questions
Problem 48BEB: Performance Report Based on Budgeted and Actual Levels of Production Balboa Company budgeted...
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Rooney Company produces two products. Budgeted annual income statements for the two products are provided as follows.
Power
Lite
Total
Budgeted
Per
Budgeted Budgeted
Per
Budgeted
Budgeted Budgeted
Number
Unit
Amount
Number
Unit
Amount
Number
Amount
@ $ 700
@ 380
$ 319,200
(168,000)
151,200
$ 487,200
(259,200)
228,000
(114,000)
$ 114,000
Sales
240
$168,000
560
@ $ 570
800
Variable cost
(91,200)
76,800
|(19,000)
$ 57,800
240
560
@
300 =
800
%3D
Contribution margin
240
320
560
@
270
800
Fixed cost
(95,000)
Net income
$
56,200
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
e. Verify the break-even point by preparing an income statement for each product as well as an income statement for the combined
products.
f. Determine the margin of safety based on the combined sales of the two products.
ey must sell to break even.
Complete this question by entering your answers in the tabs below.
Required A
Required B
Required C
Required D
Required E
Required F
Determine the number of units of each product Rooney must sell to break even.
Required sales for Power
units
Required sales for Lite
units
< Required c
Required E >
Transcribed Image Text:Rooney Company produces two products. Budgeted annual income statements for the two products are provided as follows. Power Lite Total Budgeted Per Budgeted Budgeted Per Budgeted Budgeted Budgeted Number Unit Amount Number Unit Amount Number Amount @ $ 700 @ 380 $ 319,200 (168,000) 151,200 $ 487,200 (259,200) 228,000 (114,000) $ 114,000 Sales 240 $168,000 560 @ $ 570 800 Variable cost (91,200) 76,800 |(19,000) $ 57,800 240 560 @ 300 = 800 %3D Contribution margin 240 320 560 @ 270 800 Fixed cost (95,000) Net income $ 56,200 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 e. Verify the break-even point by preparing an income statement for each product as well as an income statement for the combined products. f. Determine the margin of safety based on the combined sales of the two products. ey must sell to break even. Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Required E Required F Determine the number of units of each product Rooney must sell to break even. Required sales for Power units Required sales for Lite units < Required c Required E >
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