Question

11 Our company makes and sells three products: A, B, and C. Selected GAAP income statement information is below: 20,000 $300,000 $100,000 5,000 $500,000 $150,000 10,000 $450,000 $160,000 Units sold Sales Gross margin Fixed Manufacturing Costs allocated to products by machine hours Fixed Non-Manufacturing Costs allocated to products by various methods GAAP Net Operating Income by products $40,000 $198,000 $77,100 $68,900 $11,100 $70,800 $31,200 $21,000 $41,900 Assuming constant sales mix, our breakeven revenue point in dollars is closest to $358,705 $703,348 $1,450,610 $2,428,542 $1,062,054

Answer 1

the answer has been presented in the supporting sheet. For detailed answer refer to the supporting sheet.

Total Answer 2 Part 1) The correct answer is E) $1062054 Table for calculations 5 Particulars 5 Units sold 20000 - Sales 300000 B Gross Margin 100000 e Fixed manufacturing cost 40000 0 Fixed Non Manufacturing Cost 68900 1 Net Income 11100 2 Variable cost of goods sold (sales-Gross Margin- fixed mal 160000 3 Variable non manufacturing cost (gross margin- non manut 20000 4 Contribution Margin (sales - variable cost) 120000 5 Contribution margin per unit 6 Sales Per Unit 7 Wheights (repective units / total units) 0.57 8 Weighted average contribution margin 3.43 9 Weighted average selling price 8.57 1 Contribution margin ratio = contribution margin / sales 2 = 16/35.71*100 3 = 44.8% 5000 500000 150000 198000 70800 31200 152000 48000 300000 60 100 0.14 8.57 14.29 10000 450000 160000 77100 21000 41900 212900 97100 140000 1250000 410000 315100 160700 84200 524900 165100 560000 80 14 160 45 0.29 4.00 12.86 16 35.71 5 Break even sale = fixed cost / contribution margin 6 = (315100+160700)/44.8% 7 = $ 1062054 9 Thus the correct answer is $ 1062054