The Blanket Company (TBC) manufactures two types of blankets. One is made of nylon. The other is made of wool. The budgeted per- unit contribution margin for each product follows. Sales price Variable cost per unit Contribution margin per unit Nylon $ 143 Required (83) $ 60 Wool $ 195 (85) $ 110 TBC expects to incur annual fixed costs of $733,000. The relative sales mix of the products is 80 percent for Nylon and 20 percent for Wool. a. Determine the total number of products (units of Nylon and Wool combined) TBC must sell to earn a $107,000 profit. b. How many units each of Nylon and Wool blankets must TBC sell to earn a $107,000 profit? c. Prepare an income statement using the contribution margin format.
The Blanket Company (TBC) manufactures two types of blankets. One is made of nylon. The other is made of wool. The budgeted per- unit contribution margin for each product follows. Sales price Variable cost per unit Contribution margin per unit Nylon $ 143 Required (83) $ 60 Wool $ 195 (85) $ 110 TBC expects to incur annual fixed costs of $733,000. The relative sales mix of the products is 80 percent for Nylon and 20 percent for Wool. a. Determine the total number of products (units of Nylon and Wool combined) TBC must sell to earn a $107,000 profit. b. How many units each of Nylon and Wool blankets must TBC sell to earn a $107,000 profit? c. Prepare an income statement using the contribution margin format.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:The Blanket Company (TBC) manufactures two types of blankets. One is made of nylon. The other is made of wool. The budgeted per-
unit contribution margin for each product follows.
Sales price
Variable cost per unit
Contribution margin per unit
Required
Nylon.
$ 143
(83)
$ 60
TBC expects to incur annual fixed costs of $733,000. The relative sales mix of the products is 80 percent for Nylon and 20 percent for
Wool.
Wool
$ 195
(85)
$ 110
a. Determine the total number of products (units of Nylon and Wool combined) TBC must sell to earn a $107,000 profit.
b. How many units each of Nylon and Wool blankets must TBC sell to earn a $107,000 profit?
c. Prepare an income statement using the contribution margin format.
Required A Required B Required C
Complete this question by entering your answers in the tabs below.
Prepare an income statement using the contribution margin format.
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