Steinberg Company produces commercial printers. One is the regular model, a basic model that is designed to copy and print in black and white. Another model, the deluxe model, is a color printer-scanner-copier. For the coming year, Steinberg expects to sell 90,000 regular models and 18,000 deluxe models. A segmented income statement for the two products is as follows: Regular Model Deluxe Model Sales Less: Variable costs Contribution margin Less: Direct fixed costs Segment margin Less: Common fixed costs Operating income Required: $14,400,000 8,640,000 $5,760,000 1,200,000 $4,560,000 $12,060,000 7,236,000 $4,824,000 960,000 $3,864,000 Total $26,460,000 15,876,000 $10,584,000 2,160,000 $8,424,000 1,485,600 $6,938,400 1. Compute the number of regular models and deluxe models that must be sold to break even. Round your answers to the nearest whole unit. Regular models 31,000 units Deluxe models 6,200 units 2. Using information only from the total column of the income statement, compute the sales revenue that must be generated for the company to break even. Round the contribution margin ratio to four decimal places. Use the rounded value in the subsequent computation. (Express as a decimal-based amount rather than a whole percentage.) Round the amount of revenue to the nearest dollar. Contribution margin ratio Revenue
Steinberg Company produces commercial printers. One is the regular model, a basic model that is designed to copy and print in black and white. Another model, the deluxe model, is a color printer-scanner-copier. For the coming year, Steinberg expects to sell 90,000 regular models and 18,000 deluxe models. A segmented income statement for the two products is as follows: Regular Model Deluxe Model Sales Less: Variable costs Contribution margin Less: Direct fixed costs Segment margin Less: Common fixed costs Operating income Required: $14,400,000 8,640,000 $5,760,000 1,200,000 $4,560,000 $12,060,000 7,236,000 $4,824,000 960,000 $3,864,000 Total $26,460,000 15,876,000 $10,584,000 2,160,000 $8,424,000 1,485,600 $6,938,400 1. Compute the number of regular models and deluxe models that must be sold to break even. Round your answers to the nearest whole unit. Regular models 31,000 units Deluxe models 6,200 units 2. Using information only from the total column of the income statement, compute the sales revenue that must be generated for the company to break even. Round the contribution margin ratio to four decimal places. Use the rounded value in the subsequent computation. (Express as a decimal-based amount rather than a whole percentage.) Round the amount of revenue to the nearest dollar. Contribution margin ratio Revenue
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Steinberg Company produces commercial printers. One is the regular model, a basic model that is designed to copy and print in black and white.
Another model, the deluxe model, is a color printer-scanner-copier. For the coming year, Steinberg expects to sell 90,000 regular models and 18,000
deluxe models. A segmented income statement for the two products is as follows:
Regular Model Deluxe Model
Sales
Less: Variable costs
Contribution margin
Less: Direct fixed costs
Segment margin
Less: Common fixed costs
Operating income
$14,400,000
8,640,000
Revenue
$5,760,000
1,200,000
$4,560,000
$12,060,000
7,236,000
$4,824,000
960,000
$3,864,000
Total
$26,460,000
15,876,000
$10,584,000
2,160,000
$8,424,000
1,485,600
$6,938,400
Required:
1. Compute the number of regular models and deluxe models that must be sold to break even. Round your answers to the nearest whole unit.
Regular models
31,000 units
Deluxe models
6,200 units
2. Using information only from the total column of the income statement, compute the sales revenue that must be generated for the company to
break even. Round the contribution margin ratio to four decimal places. Use the rounded value in the subsequent computation. (Express as a
decimal-based amount rather than a whole percentage.) Round the amount of revenue to the nearest dollar.
Contribution margin ratio
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