Question

Paused Google or type a URL Homework i Save & Exit Submit Saved Help Check my work ATE. Problem 3-63 (Static) Extensions of the CVP Model-Multiple Products (LO 3-4) On-the-Go, Inc., produces two models of traveling cases for laptop computers-the Programmer and the Executive. The bags have the following characteristics. Programmer Executive Selling price per bag Variable cost per bag Expected sales (bags) per year 70 100 k $ 30 %24 40 8,000 12,000 Ices The total fixed costs per year for the company are $819,000. Required: a. What is the anticipated level of profits for the expected sales volumes? b. Assuming that the product mix is the same at the break-even point, compute the break-even point. c. If the product sales mix were to change to nine Programmer-style bags for each Executive-style bag, what would be the new FLIX break-even volume for On-the-Go? Complete this question by entering your answers in the tabs below. 8 of 8 Next> ( Prev 1:21 PM P Type here to search 1/16/2020

Answer 1

Required a) Particulars programmer executive Total Selling price Less: variable cost Contribution margin Sales Quantity Total contribution margin 70 $ 100 $ (30) $ (40) $ 40 $ 60 $ 8000 12000 $ 320,000 $ 720,000 $ 170 (70) 100 1,040,000 Less:Fixed cost Profit/ (loss) $ $ (819,000) 819,100 Required b) weighted average Contribution margin per unit = 1040000 / (80000 +12000) 1040000 / 20000 $ 52 weighted average Contribution margin per unit = Break even point in unit) Fixed Cost Contribution margin per unit 819000 52 15,750

In break even point sale there will be no Profit or loss. Required c) Particulars programmer executive Total Contribution margin 60 Sales Quantity 1 Total contribution margin 360 60 $ 420 Total units sold ( 9+1) new weighted average Contribution margin per unit = 420/10 $ 42 Break even point in unit) Fixed Cost Contribution margin per unit = 819000 42 19,500 Please comment if you have any doubt Please give thumps up if you are satisfied with the answer