Using a Computer Spreadsheet to Solve Multiple- Product Break-Even: Varying Sales Mix More-Power Company has projected sales of 75,000 regular sanders and 30,000 mini-sanders for next year. The projected income statement is as follows: Regular Sander Mini-Sander Total Sales $3,000,000 $1,800,000 $4,800,000 Less: Variable expenses 1,800,000 900,000 2,700,000 Contribution margin $1,200,000 $900,000 $2,100,000 Less: Direct fixed expenses 700,000 250,000 450,000 $450,000 Product margin $950,000 $1,400,000 Less: Common fixed 600,000 expenses $800,000 Operating income Required: 1. For each of the following possible sales mixes, calculate operating income: Regular Sander Mini-Sander 37,500 75,000 а. b. 60,000 60,000 30,000 90,000 C. d. 30,000 60,000 Operating Income а. b. C. d. 2. Calculate the break-even units for each product for each of the preceding sales mixes. Round the number of break-even packages to two decimal places (and use this figure for intermediate calculations). Round the number of break-even regular and mini-sanders to the nearest whole unit. b a C Break-even packages Break-even regular sanders Break-even mini-sanders

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Using a Computer Spreadsheet to Solve Multiple- Product Break-Even: Varying Sales Mix
More-Power Company has projected sales of 75,000 regular sanders and 30,000 mini-sanders for next year. The projected income statement is as follows:
Regular Sander
Mini-Sander
Total
Sales
$3,000,000
$1,800,000
$4,800,000
Less: Variable expenses
1,800,000
900,000
2,700,000
Contribution margin
$1,200,000
$900,000
$2,100,000
Less: Direct fixed expenses
700,000
250,000
450,000
$450,000
Product margin
$950,000
$1,400,000
Less: Common fixed
600,000
expenses
$800,000
Operating income
Required:
1. For each of the following possible sales mixes, calculate operating income:
Regular Sander Mini-Sander
37,500
75,000
а.
b.
60,000
60,000
30,000
90,000
C.
d.
30,000
60,000
Operating Income
а.
b.
C.
d.
2. Calculate the break-even units for each product for each of the preceding sales mixes. Round the number of break-even packages to two decimal places (and use this figure for intermediate calculations). Round the number of break-even regular and mini-sanders to the nearest
whole unit.
b
a
C
Break-even packages
Break-even regular sanders
Break-even mini-sanders
Transcribed Image Text:Using a Computer Spreadsheet to Solve Multiple- Product Break-Even: Varying Sales Mix More-Power Company has projected sales of 75,000 regular sanders and 30,000 mini-sanders for next year. The projected income statement is as follows: Regular Sander Mini-Sander Total Sales $3,000,000 $1,800,000 $4,800,000 Less: Variable expenses 1,800,000 900,000 2,700,000 Contribution margin $1,200,000 $900,000 $2,100,000 Less: Direct fixed expenses 700,000 250,000 450,000 $450,000 Product margin $950,000 $1,400,000 Less: Common fixed 600,000 expenses $800,000 Operating income Required: 1. For each of the following possible sales mixes, calculate operating income: Regular Sander Mini-Sander 37,500 75,000 а. b. 60,000 60,000 30,000 90,000 C. d. 30,000 60,000 Operating Income а. b. C. d. 2. Calculate the break-even units for each product for each of the preceding sales mixes. Round the number of break-even packages to two decimal places (and use this figure for intermediate calculations). Round the number of break-even regular and mini-sanders to the nearest whole unit. b a C Break-even packages Break-even regular sanders Break-even mini-sanders
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