Question

CD6 EXCEL Tutorial CURRENT DESIGNS The following information is available for each product line. urrent Designs manufactures two different types of kayak, rotomolded kayaks and composite kayaks. Rotomolded Sales price/unit Variable costs/unit $950 $570 Composite $2,000 $1,340 The company's fixed costs are $820,000. An analysis of the sales mix identifies tha make up 80% of the total units sold t rotomolded kayaks Instructions (a) D etermine the weighted-average unit contribution margin for Current Designs. (b) Determine the break-even points in type of kayak will be sold at the break-even point. (Round to the nearest whole number.) units for Current Designs and identify how many units of each (c ) Assume that the sales mix changes, and rotomolded kayaks now make up 70% of total units sold. Calculate the total number of units that would need to be sold to earn a net income of $2,000,000 and identify how many units of each type of kayak will be sold at this level of income. (Round to the nearest whole number.) Assume that Current Designs will have sales of $3,000,000 with two-thirds of the sales dollars in rotomolded kayaks and one-third of the sales dollars in composite kayaks. Assuming $660,000 of fixed costs are allocated to the rotomolded kayaks and $160,000 to the composite kayaks, prepare a CVP income statement for each product line. (d) e) Using the information in part (d), calculate the degree of operating leverage for each product line and interpret your findings. (Round to two decimal places.) l(a) Determine the weighted-average unit contribution margin for Current Designs

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Part A Answer:

Part B Answer:

Part C Answer:

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Part D Answer: