(a) Concept introduction: Breakeven Point: The level of sales where the company is neither on profit nor loss is termed as breakeven point. In other words, that level of sales at which the fixed cost of the business is recovered. The breakeven point if the product mix is 40 / 60 .

Question

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Answer 1

Question

Chapter 6, Problem 17E

To determine

(a)

Concept introduction:

Breakeven Point:

The level of sales where the company is neither on profit nor loss is termed as breakeven point. In other words, that level of sales at which the fixed cost of the business is recovered.

The breakeven point if the product mix is $40/60$ .

Expert Solution

Answer to Problem 17E

The breakeven point in units is $862 units$ .

Explanation of Solution

Contribution Margin Income Statement

Particulars	Standard	Deluxe
Rental Price $(A)$	$$30$	$$38$
Variable Cost per Canoe $(B)$	$($10.50)$	$($15.20)$
Contribution Margin $(A−B)$	$$19.50$	$$22.80$

As the product mix is $40/60$

So, the weighted contribution margin is calculated as:

$Weighted Contribution Margin=(19.50× 40 100)+(22.80× 60 100)=$21.48$

The break-even point in units is calculated as:

$Breakeven Point=Fixed CostWeighted Contribution Margin=$18,500$21.48=862 units$

To determine

(b)

Concept introduction:

Breakeven Point:

The level of sales where the company is neither on profit nor loss is termed as breakeven point. In other words, that level of sales at which the fixed cost of the business is recovered.

The breakeven point if the sales of both model increases by $20%$ and the product mix changes to $50/50$ .

Expert Solution

Answer to Problem 17E

The breakeven point in units is $662 units$ .

Explanation of Solution

Contribution Margin Income Statement

Particulars	Standard	Deluxe
Rental Price $(A)$	$$36($30×1.2)$	$$45.6($38×1.2)$
Variable Cost per Canoe $(B)$	$($10.50)$	$($15.20)$
Contribution Margin $(A−B)$	$$25.50$	$$30.40$

As the product mix is $50/50$

So, the weighted contribution margin is calculated as:

$Weighted Contribution Margin=(25.50× 50 100)+(30.40× 50 100)=$27.95$

The break-even point in units is calculated as:

$Breakeven Point=Fixed CostWeighted Contribution Margin=$18,500$27.95=662 units$

To determine

(c)

Concept introduction:

Breakeven Point:

The level of sales where the company is neither on profit nor loss is termed as breakeven point. In other words, that level of sales at which the fixed cost of the business is recovered.

The breakeven point if the fixed cost is increased by $$5,200$ and the product mix changes to $50/50$ .

Expert Solution

Answer to Problem 17E

The breakeven point in units is $1121 units$ .

Explanation of Solution

Contribution Margin Income Statement

Particulars	Standard	Deluxe
Rental Price $(A)$	$$30$	$$38$
Variable Cost per Canoe $(B)$	$($10.50)$	$($15.20)$
Contribution Margin $(A−B)$	$$19.50$	$$22.80$

As the product mix is $50/50$

So, the weighted contribution margin is calculated as:

$Weighted Contribution Margin=(19.50× 50 100)+(22.80× 50 100)=$21.15$

The break-even point in units is calculated as:

$Breakeven Point=Fixed CostWeighted Contribution Margin=$23,700$21.15=1121 units$

To determine

(d)

Concept introduction:

Breakeven Point:

The level of sales where the company is neither on profit nor loss is termed as breakeven point. In other words, that level of sales at which the fixed cost of the business is recovered.

The breakeven point if the variable cost increases by $30%$ and the product mix changes to $50/50$ .

Expert Solution

Answer to Problem 17E

The breakeven point in units is $1070 units$ .

Explanation of Solution

Contribution Margin Income Statement

Particulars	Standard	Deluxe
Rental Price $(A)$	$$30$	$$38$
Variable Cost per Canoe $(B)$	$($13.65)($10.50×1.30)$	$($19.76)($15.20×1.30)$
Contribution Margin $(A−B)$	$$16.35$	$$18.24$

As the product mix is $50/50$

So, the weighted contribution margin is calculated as:

$Weighted Contribution Margin=(16.35× 50 100)+(18.24× 50 100)=$17.295$

The break-even point in units is calculated as:

$Breakeven Point=Fixed CostWeighted Contribution Margin=$18,500$17.295=1070 units$

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Answer 2

Question

Chapter 6, Problem 17E

To determine

(a)

Concept introduction:

Breakeven Point:

The level of sales where the company is neither on profit nor loss is termed as breakeven point. In other words, that level of sales at which the fixed cost of the business is recovered.

The breakeven point if the product mix is $40/60$ .

Expert Solution

Answer to Problem 17E

The breakeven point in units is $862 units$ .

Explanation of Solution

Contribution Margin Income Statement

Particulars	Standard	Deluxe
Rental Price $(A)$	$$30$	$$38$
Variable Cost per Canoe $(B)$	$($10.50)$	$($15.20)$
Contribution Margin $(A−B)$	$$19.50$	$$22.80$

As the product mix is $40/60$

So, the weighted contribution margin is calculated as:

$Weighted Contribution Margin=(19.50× 40 100)+(22.80× 60 100)=$21.48$

The break-even point in units is calculated as:

$Breakeven Point=Fixed CostWeighted Contribution Margin=$18,500$21.48=862 units$

To determine

(b)

Concept introduction:

Breakeven Point:

The level of sales where the company is neither on profit nor loss is termed as breakeven point. In other words, that level of sales at which the fixed cost of the business is recovered.

The breakeven point if the sales of both model increases by $20%$ and the product mix changes to $50/50$ .

Expert Solution

Answer to Problem 17E

The breakeven point in units is $662 units$ .

Explanation of Solution

Contribution Margin Income Statement

Particulars	Standard	Deluxe
Rental Price $(A)$	$$36($30×1.2)$	$$45.6($38×1.2)$
Variable Cost per Canoe $(B)$	$($10.50)$	$($15.20)$
Contribution Margin $(A−B)$	$$25.50$	$$30.40$

As the product mix is $50/50$

So, the weighted contribution margin is calculated as:

$Weighted Contribution Margin=(25.50× 50 100)+(30.40× 50 100)=$27.95$

The break-even point in units is calculated as:

$Breakeven Point=Fixed CostWeighted Contribution Margin=$18,500$27.95=662 units$

To determine

(c)

Concept introduction:

Breakeven Point:

The level of sales where the company is neither on profit nor loss is termed as breakeven point. In other words, that level of sales at which the fixed cost of the business is recovered.

The breakeven point if the fixed cost is increased by $$5,200$ and the product mix changes to $50/50$ .

Expert Solution

Answer to Problem 17E

The breakeven point in units is $1121 units$ .

Explanation of Solution

Contribution Margin Income Statement

Particulars	Standard	Deluxe
Rental Price $(A)$	$$30$	$$38$
Variable Cost per Canoe $(B)$	$($10.50)$	$($15.20)$
Contribution Margin $(A−B)$	$$19.50$	$$22.80$

As the product mix is $50/50$

So, the weighted contribution margin is calculated as:

$Weighted Contribution Margin=(19.50× 50 100)+(22.80× 50 100)=$21.15$

The break-even point in units is calculated as:

$Breakeven Point=Fixed CostWeighted Contribution Margin=$23,700$21.15=1121 units$

To determine

(d)

Concept introduction:

Breakeven Point:

The level of sales where the company is neither on profit nor loss is termed as breakeven point. In other words, that level of sales at which the fixed cost of the business is recovered.

The breakeven point if the variable cost increases by $30%$ and the product mix changes to $50/50$ .

Expert Solution

Answer to Problem 17E

The breakeven point in units is $1070 units$ .

Explanation of Solution

Contribution Margin Income Statement

Particulars	Standard	Deluxe
Rental Price $(A)$	$$30$	$$38$
Variable Cost per Canoe $(B)$	$($13.65)($10.50×1.30)$	$($19.76)($15.20×1.30)$
Contribution Margin $(A−B)$	$$16.35$	$$18.24$

As the product mix is $50/50$

So, the weighted contribution margin is calculated as:

$Weighted Contribution Margin=(16.35× 50 100)+(18.24× 50 100)=$17.295$

The break-even point in units is calculated as:

$Breakeven Point=Fixed CostWeighted Contribution Margin=$18,500$17.295=1070 units$

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Answer 3

Question

Chapter 6, Problem 17E

To determine

(a)

Concept introduction:

Breakeven Point:

The level of sales where the company is neither on profit nor loss is termed as breakeven point. In other words, that level of sales at which the fixed cost of the business is recovered.

The breakeven point if the product mix is $40/60$ .

Expert Solution

Answer to Problem 17E

The breakeven point in units is $862 units$ .

Explanation of Solution

Contribution Margin Income Statement

Particulars	Standard	Deluxe
Rental Price $(A)$	$$30$	$$38$
Variable Cost per Canoe $(B)$	$($10.50)$	$($15.20)$
Contribution Margin $(A−B)$	$$19.50$	$$22.80$

As the product mix is $40/60$

So, the weighted contribution margin is calculated as:

$Weighted Contribution Margin=(19.50× 40 100)+(22.80× 60 100)=$21.48$

The break-even point in units is calculated as:

$Breakeven Point=Fixed CostWeighted Contribution Margin=$18,500$21.48=862 units$

To determine

(b)

Concept introduction:

Breakeven Point:

The level of sales where the company is neither on profit nor loss is termed as breakeven point. In other words, that level of sales at which the fixed cost of the business is recovered.

The breakeven point if the sales of both model increases by $20%$ and the product mix changes to $50/50$ .

Expert Solution

Answer to Problem 17E

The breakeven point in units is $662 units$ .

Explanation of Solution

Contribution Margin Income Statement

Particulars	Standard	Deluxe
Rental Price $(A)$	$$36($30×1.2)$	$$45.6($38×1.2)$
Variable Cost per Canoe $(B)$	$($10.50)$	$($15.20)$
Contribution Margin $(A−B)$	$$25.50$	$$30.40$

As the product mix is $50/50$

So, the weighted contribution margin is calculated as:

$Weighted Contribution Margin=(25.50× 50 100)+(30.40× 50 100)=$27.95$

The break-even point in units is calculated as:

$Breakeven Point=Fixed CostWeighted Contribution Margin=$18,500$27.95=662 units$

To determine

(c)

Concept introduction:

Breakeven Point:

The level of sales where the company is neither on profit nor loss is termed as breakeven point. In other words, that level of sales at which the fixed cost of the business is recovered.

The breakeven point if the fixed cost is increased by $$5,200$ and the product mix changes to $50/50$ .

Expert Solution

Answer to Problem 17E

The breakeven point in units is $1121 units$ .

Explanation of Solution

Contribution Margin Income Statement

Particulars	Standard	Deluxe
Rental Price $(A)$	$$30$	$$38$
Variable Cost per Canoe $(B)$	$($10.50)$	$($15.20)$
Contribution Margin $(A−B)$	$$19.50$	$$22.80$

As the product mix is $50/50$

So, the weighted contribution margin is calculated as:

$Weighted Contribution Margin=(19.50× 50 100)+(22.80× 50 100)=$21.15$

The break-even point in units is calculated as:

$Breakeven Point=Fixed CostWeighted Contribution Margin=$23,700$21.15=1121 units$

To determine

(d)

Concept introduction:

Breakeven Point:

The level of sales where the company is neither on profit nor loss is termed as breakeven point. In other words, that level of sales at which the fixed cost of the business is recovered.

The breakeven point if the variable cost increases by $30%$ and the product mix changes to $50/50$ .

Expert Solution

Answer to Problem 17E

The breakeven point in units is $1070 units$ .

Explanation of Solution

Contribution Margin Income Statement

Particulars	Standard	Deluxe
Rental Price $(A)$	$$30$	$$38$
Variable Cost per Canoe $(B)$	$($13.65)($10.50×1.30)$	$($19.76)($15.20×1.30)$
Contribution Margin $(A−B)$	$$16.35$	$$18.24$

As the product mix is $50/50$

So, the weighted contribution margin is calculated as:

$Weighted Contribution Margin=(16.35× 50 100)+(18.24× 50 100)=$17.295$

The break-even point in units is calculated as:

$Breakeven Point=Fixed CostWeighted Contribution Margin=$18,500$17.295=1070 units$

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Answer 4

Question

Chapter 6, Problem 17E

To determine

(a)

Concept introduction:

Breakeven Point:

The level of sales where the company is neither on profit nor loss is termed as breakeven point. In other words, that level of sales at which the fixed cost of the business is recovered.

The breakeven point if the product mix is $40/60$ .

Expert Solution

Answer to Problem 17E

The breakeven point in units is $862 units$ .

Explanation of Solution

Contribution Margin Income Statement

Particulars	Standard	Deluxe
Rental Price $(A)$	$$30$	$$38$
Variable Cost per Canoe $(B)$	$($10.50)$	$($15.20)$
Contribution Margin $(A−B)$	$$19.50$	$$22.80$

As the product mix is $40/60$

So, the weighted contribution margin is calculated as:

$Weighted Contribution Margin=(19.50× 40 100)+(22.80× 60 100)=$21.48$

The break-even point in units is calculated as:

$Breakeven Point=Fixed CostWeighted Contribution Margin=$18,500$21.48=862 units$

To determine

(b)

Concept introduction:

Breakeven Point:

The level of sales where the company is neither on profit nor loss is termed as breakeven point. In other words, that level of sales at which the fixed cost of the business is recovered.

The breakeven point if the sales of both model increases by $20%$ and the product mix changes to $50/50$ .

Expert Solution

Answer to Problem 17E

The breakeven point in units is $662 units$ .

Explanation of Solution

Contribution Margin Income Statement

Particulars	Standard	Deluxe
Rental Price $(A)$	$$36($30×1.2)$	$$45.6($38×1.2)$
Variable Cost per Canoe $(B)$	$($10.50)$	$($15.20)$
Contribution Margin $(A−B)$	$$25.50$	$$30.40$

As the product mix is $50/50$

So, the weighted contribution margin is calculated as:

$Weighted Contribution Margin=(25.50× 50 100)+(30.40× 50 100)=$27.95$

The break-even point in units is calculated as:

$Breakeven Point=Fixed CostWeighted Contribution Margin=$18,500$27.95=662 units$

To determine

(c)

Concept introduction:

Breakeven Point:

The level of sales where the company is neither on profit nor loss is termed as breakeven point. In other words, that level of sales at which the fixed cost of the business is recovered.

The breakeven point if the fixed cost is increased by $$5,200$ and the product mix changes to $50/50$ .

Expert Solution

Answer to Problem 17E

The breakeven point in units is $1121 units$ .

Explanation of Solution

Contribution Margin Income Statement

Particulars	Standard	Deluxe
Rental Price $(A)$	$$30$	$$38$
Variable Cost per Canoe $(B)$	$($10.50)$	$($15.20)$
Contribution Margin $(A−B)$	$$19.50$	$$22.80$

As the product mix is $50/50$

So, the weighted contribution margin is calculated as:

$Weighted Contribution Margin=(19.50× 50 100)+(22.80× 50 100)=$21.15$

The break-even point in units is calculated as:

$Breakeven Point=Fixed CostWeighted Contribution Margin=$23,700$21.15=1121 units$

To determine

(d)

Concept introduction:

Breakeven Point:

The level of sales where the company is neither on profit nor loss is termed as breakeven point. In other words, that level of sales at which the fixed cost of the business is recovered.

The breakeven point if the variable cost increases by $30%$ and the product mix changes to $50/50$ .

Expert Solution

Answer to Problem 17E

The breakeven point in units is $1070 units$ .

Explanation of Solution

Contribution Margin Income Statement

Particulars	Standard	Deluxe
Rental Price $(A)$	$$30$	$$38$
Variable Cost per Canoe $(B)$	$($13.65)($10.50×1.30)$	$($19.76)($15.20×1.30)$
Contribution Margin $(A−B)$	$$16.35$	$$18.24$

As the product mix is $50/50$

So, the weighted contribution margin is calculated as:

$Weighted Contribution Margin=(16.35× 50 100)+(18.24× 50 100)=$17.295$

The break-even point in units is calculated as:

$Breakeven Point=Fixed CostWeighted Contribution Margin=$18,500$17.295=1070 units$

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Answer 5

Chapter 6, Problem 17E

To determine

(a)

Concept introduction:

Breakeven Point:

The level of sales where the company is neither on profit nor loss is termed as breakeven point. In other words, that level of sales at which the fixed cost of the business is recovered.

The breakeven point if the product mix is $40/60$ .

Expert Solution

Answer to Problem 17E

The breakeven point in units is $862 units$ .

Explanation of Solution

Contribution Margin Income Statement

Particulars	Standard	Deluxe
Rental Price $(A)$	$$30$	$$38$
Variable Cost per Canoe $(B)$	$($10.50)$	$($15.20)$
Contribution Margin $(A−B)$	$$19.50$	$$22.80$

As the product mix is $40/60$

So, the weighted contribution margin is calculated as:

$Weighted Contribution Margin=(19.50× 40 100)+(22.80× 60 100)=$21.48$

The break-even point in units is calculated as:

$Breakeven Point=Fixed CostWeighted Contribution Margin=$18,500$21.48=862 units$

To determine

(b)

Concept introduction:

Breakeven Point:

The level of sales where the company is neither on profit nor loss is termed as breakeven point. In other words, that level of sales at which the fixed cost of the business is recovered.

The breakeven point if the sales of both model increases by $20%$ and the product mix changes to $50/50$ .

Expert Solution

Answer to Problem 17E

The breakeven point in units is $662 units$ .

Explanation of Solution

Contribution Margin Income Statement

Particulars	Standard	Deluxe
Rental Price $(A)$	$$36($30×1.2)$	$$45.6($38×1.2)$
Variable Cost per Canoe $(B)$	$($10.50)$	$($15.20)$
Contribution Margin $(A−B)$	$$25.50$	$$30.40$

As the product mix is $50/50$

So, the weighted contribution margin is calculated as:

$Weighted Contribution Margin=(25.50× 50 100)+(30.40× 50 100)=$27.95$

The break-even point in units is calculated as:

$Breakeven Point=Fixed CostWeighted Contribution Margin=$18,500$27.95=662 units$

To determine

(c)

Concept introduction:

Breakeven Point:

The level of sales where the company is neither on profit nor loss is termed as breakeven point. In other words, that level of sales at which the fixed cost of the business is recovered.

The breakeven point if the fixed cost is increased by $$5,200$ and the product mix changes to $50/50$ .

Expert Solution

Answer to Problem 17E

The breakeven point in units is $1121 units$ .

Explanation of Solution

Contribution Margin Income Statement

Particulars	Standard	Deluxe
Rental Price $(A)$	$$30$	$$38$
Variable Cost per Canoe $(B)$	$($10.50)$	$($15.20)$
Contribution Margin $(A−B)$	$$19.50$	$$22.80$

As the product mix is $50/50$

So, the weighted contribution margin is calculated as:

$Weighted Contribution Margin=(19.50× 50 100)+(22.80× 50 100)=$21.15$

The break-even point in units is calculated as:

$Breakeven Point=Fixed CostWeighted Contribution Margin=$23,700$21.15=1121 units$

To determine

(d)

Concept introduction:

Breakeven Point:

The level of sales where the company is neither on profit nor loss is termed as breakeven point. In other words, that level of sales at which the fixed cost of the business is recovered.

The breakeven point if the variable cost increases by $30%$ and the product mix changes to $50/50$ .

Expert Solution

Answer to Problem 17E

The breakeven point in units is $1070 units$ .

Explanation of Solution

Contribution Margin Income Statement

Particulars	Standard	Deluxe
Rental Price $(A)$	$$30$	$$38$
Variable Cost per Canoe $(B)$	$($13.65)($10.50×1.30)$	$($19.76)($15.20×1.30)$
Contribution Margin $(A−B)$	$$16.35$	$$18.24$

As the product mix is $50/50$

So, the weighted contribution margin is calculated as:

$Weighted Contribution Margin=(16.35× 50 100)+(18.24× 50 100)=$17.295$

The break-even point in units is calculated as:

$Breakeven Point=Fixed CostWeighted Contribution Margin=$18,500$17.295=1070 units$

Answer 6

Chapter 6, Problem 17E

To determine

(a)

Concept introduction:

Breakeven Point:

The level of sales where the company is neither on profit nor loss is termed as breakeven point. In other words, that level of sales at which the fixed cost of the business is recovered.

The breakeven point if the product mix is $40/60$ .

Expert Solution

Answer to Problem 17E

The breakeven point in units is $862 units$ .

Explanation of Solution

Contribution Margin Income Statement

Particulars	Standard	Deluxe
Rental Price $(A)$	$$30$	$$38$
Variable Cost per Canoe $(B)$	$($10.50)$	$($15.20)$
Contribution Margin $(A−B)$	$$19.50$	$$22.80$

As the product mix is $40/60$

So, the weighted contribution margin is calculated as:

$Weighted Contribution Margin=(19.50× 40 100)+(22.80× 60 100)=$21.48$

The break-even point in units is calculated as:

$Breakeven Point=Fixed CostWeighted Contribution Margin=$18,500$21.48=862 units$

Answer 7

Chapter 6, Problem 17E

To determine

(a)

Concept introduction:

Breakeven Point:

The level of sales where the company is neither on profit nor loss is termed as breakeven point. In other words, that level of sales at which the fixed cost of the business is recovered.

The breakeven point if the product mix is $40/60$ .

Answer 8

Expert Solution

Answer to Problem 17E

The breakeven point in units is $862 units$ .

Answer 9

Expert Solution

Answer 10

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

Contribution Margin Income Statement

Particulars	Standard	Deluxe
Rental Price $(A)$	$$30$	$$38$
Variable Cost per Canoe $(B)$	$($10.50)$	$($15.20)$
Contribution Margin $(A−B)$	$$19.50$	$$22.80$

As the product mix is $40/60$

So, the weighted contribution margin is calculated as:

$Weighted Contribution Margin=(19.50× 40 100)+(22.80× 60 100)=$21.48$

The break-even point in units is calculated as:

$Breakeven Point=Fixed CostWeighted Contribution Margin=$18,500$21.48=862 units$

Answer 13

To determine

(b)

Concept introduction:

Breakeven Point:

The level of sales where the company is neither on profit nor loss is termed as breakeven point. In other words, that level of sales at which the fixed cost of the business is recovered.

The breakeven point if the sales of both model increases by $20%$ and the product mix changes to $50/50$ .

Expert Solution

Answer to Problem 17E

The breakeven point in units is $662 units$ .

Explanation of Solution

Contribution Margin Income Statement

Particulars	Standard	Deluxe
Rental Price $(A)$	$$36($30×1.2)$	$$45.6($38×1.2)$
Variable Cost per Canoe $(B)$	$($10.50)$	$($15.20)$
Contribution Margin $(A−B)$	$$25.50$	$$30.40$

As the product mix is $50/50$

So, the weighted contribution margin is calculated as:

$Weighted Contribution Margin=(25.50× 50 100)+(30.40× 50 100)=$27.95$

The break-even point in units is calculated as:

$Breakeven Point=Fixed CostWeighted Contribution Margin=$18,500$27.95=662 units$

Answer 14

To determine

(b)

Concept introduction:

Breakeven Point:

The level of sales where the company is neither on profit nor loss is termed as breakeven point. In other words, that level of sales at which the fixed cost of the business is recovered.

The breakeven point if the sales of both model increases by $20%$ and the product mix changes to $50/50$ .

Answer 15

Expert Solution

Answer to Problem 17E

The breakeven point in units is $662 units$ .

Answer 16

Expert Solution

Answer 17

Expert Solution

Answer 18

Expert Solution

Answer 19

Explanation of Solution

Contribution Margin Income Statement

Particulars	Standard	Deluxe
Rental Price $(A)$	$$36($30×1.2)$	$$45.6($38×1.2)$
Variable Cost per Canoe $(B)$	$($10.50)$	$($15.20)$
Contribution Margin $(A−B)$	$$25.50$	$$30.40$

As the product mix is $50/50$

So, the weighted contribution margin is calculated as:

$Weighted Contribution Margin=(25.50× 50 100)+(30.40× 50 100)=$27.95$

The break-even point in units is calculated as:

$Breakeven Point=Fixed CostWeighted Contribution Margin=$18,500$27.95=662 units$

Answer 20

To determine

(c)

Concept introduction:

Breakeven Point:

The level of sales where the company is neither on profit nor loss is termed as breakeven point. In other words, that level of sales at which the fixed cost of the business is recovered.

The breakeven point if the fixed cost is increased by $$5,200$ and the product mix changes to $50/50$ .

Expert Solution

Answer to Problem 17E

The breakeven point in units is $1121 units$ .

Explanation of Solution

Contribution Margin Income Statement

Particulars	Standard	Deluxe
Rental Price $(A)$	$$30$	$$38$
Variable Cost per Canoe $(B)$	$($10.50)$	$($15.20)$
Contribution Margin $(A−B)$	$$19.50$	$$22.80$

As the product mix is $50/50$

So, the weighted contribution margin is calculated as:

$Weighted Contribution Margin=(19.50× 50 100)+(22.80× 50 100)=$21.15$

The break-even point in units is calculated as:

$Breakeven Point=Fixed CostWeighted Contribution Margin=$23,700$21.15=1121 units$

Answer 21

To determine

(c)

Concept introduction:

Breakeven Point:

The level of sales where the company is neither on profit nor loss is termed as breakeven point. In other words, that level of sales at which the fixed cost of the business is recovered.

The breakeven point if the fixed cost is increased by $$5,200$ and the product mix changes to $50/50$ .

Answer 22

Expert Solution

Answer to Problem 17E

The breakeven point in units is $1121 units$ .

Answer 23

Expert Solution

Answer 24

Expert Solution

Answer 25

Expert Solution

Answer 26

Explanation of Solution

Contribution Margin Income Statement

Particulars	Standard	Deluxe
Rental Price $(A)$	$$30$	$$38$
Variable Cost per Canoe $(B)$	$($10.50)$	$($15.20)$
Contribution Margin $(A−B)$	$$19.50$	$$22.80$

As the product mix is $50/50$

So, the weighted contribution margin is calculated as:

$Weighted Contribution Margin=(19.50× 50 100)+(22.80× 50 100)=$21.15$

The break-even point in units is calculated as:

$Breakeven Point=Fixed CostWeighted Contribution Margin=$23,700$21.15=1121 units$

Answer 27

To determine

(d)

Concept introduction:

Breakeven Point:

The level of sales where the company is neither on profit nor loss is termed as breakeven point. In other words, that level of sales at which the fixed cost of the business is recovered.

The breakeven point if the variable cost increases by $30%$ and the product mix changes to $50/50$ .

Expert Solution

Answer to Problem 17E

The breakeven point in units is $1070 units$ .

Explanation of Solution

Contribution Margin Income Statement

Particulars	Standard	Deluxe
Rental Price $(A)$	$$30$	$$38$
Variable Cost per Canoe $(B)$	$($13.65)($10.50×1.30)$	$($19.76)($15.20×1.30)$
Contribution Margin $(A−B)$	$$16.35$	$$18.24$

As the product mix is $50/50$

So, the weighted contribution margin is calculated as:

$Weighted Contribution Margin=(16.35× 50 100)+(18.24× 50 100)=$17.295$

The break-even point in units is calculated as:

$Breakeven Point=Fixed CostWeighted Contribution Margin=$18,500$17.295=1070 units$

Answer 28

To determine

(d)

Concept introduction:

Breakeven Point:

The level of sales where the company is neither on profit nor loss is termed as breakeven point. In other words, that level of sales at which the fixed cost of the business is recovered.

The breakeven point if the variable cost increases by $30%$ and the product mix changes to $50/50$ .

Answer 29

Expert Solution

Answer to Problem 17E

The breakeven point in units is $1070 units$ .

Answer 30

Expert Solution

Answer 31

Expert Solution

Answer 32

Expert Solution

Answer 33

Explanation of Solution

Contribution Margin Income Statement

Particulars	Standard	Deluxe
Rental Price $(A)$	$$30$	$$38$
Variable Cost per Canoe $(B)$	$($13.65)($10.50×1.30)$	$($19.76)($15.20×1.30)$
Contribution Margin $(A−B)$	$$16.35$	$$18.24$