Question

Homework: Graded Homework Chapter 3 Save Score: 0.1 of 1 pt 5 of 5 (5 complete) HW Score: 29.57%, 1.48 of 5 pts P3-51 (similar to) e Question Help The Alves Company retails two products: a standard and a deluxe version of a luggage carrier. The budgeted income statement for next period is as follows: (Click the icon to view the budgeted income statement) Read the requirements. Requirement 1. Compute the breakeven point in units, assuming that the company achieves its planned sales mix. Begin by determining the sales mix. For every 1 deluxe unit(s) sold, 4 4 standard units are sold. Determine the formula used to calculate the breakeven point when there is more than one product sold. Then, enter the amounts in the formula to calculate the breakeven point. Fixed costs Contribution margin per bundle = Breakeven point in bundles S 1,300,000 Requirements i Data Table Standard Carrier Deluxe Carrier 176.000 44,000 Total 220,000 1. Compute the breakeven point in units, assuming that the company achieves its planned sales mix. 2. Compute the breakeven point in units (a) if only standard carriers are sold and (b) if only deluxe carriers are sold. 3. Suppose 220,000 units are sold but only 22,000 of them are deluxe. Compute the operating income. Compute the breakeven point in units. Compare your answer with the answer to requirement 1. What is the major lesson of this problem? Units sold $ Revenues at $20 and $37 per unit Variable costs at $15 and $17 per unit 3,520,000 $ 2,640,000 1,628,000 $ 5,148,000 748.000 3,388,000 $ 880,000 $ 880,000 Contribution margins at $5 and $20 per unit Fixed costs 1,760,000 1,300,000 Print Done $ 460,000 Operating income 2 Print Done Clear All Check Answer

Answer 1

Explanation-

fired Cost Fixed Cost = $ 1300,000 contribution margin per bundle! - ($5*4) +$20 xt) = $40 BEP (in units & $1300,000 $40 BEP (in units) z 32,500 units A BEP when standard carrier is continued $13001 Contribution leit BEP a 1300000 $s ВЕР ? 260000 units of Standard Corrier by BEP when deluxe is continued Fixed cost $1 BOD 200 conut Ionit BEPC in units) $1300.000 20 BEP 65000 units of delure Operating Tecome cohen 220000 units are sold in cohich 22000 vnits are of deluxe delirne & Standard B14000 lates 3960,000 (198000 x 20) 0.2607% 37) vartoble cost 2979000 834.000 (198000x15) 62600X17) 440.000 Contribution 990,000 fixed cost 1300 000 Net operating Income 130,960 calculate Break even point in unit Figced cost $ 1300,000 $65 Bundled contribution 185x9 0549 + ($20X1) → Now the NO BEP 20,000 units Compavision To first Answer BEP 32,500 units but poolt or operating Income Lay $460,000, but the operating Income has reduced to $150.000, which there in Problem on sales mix at bo o in the last part of Answer means

In the first part of the answer,the comapany has a sales mix of 4:1 and operating income of 460,000,In last part of answer company has sales mix of 9:1 and operating income of 130,000.

The given difference is due to the sales mix.Where in first case 32,500 bundles were required to arrive at BEP.And in last part only 20,000 Bundle is required.Hence sales mix became very important here.

Please comment for any explanation.

Thanks