Question

Sales Mix Biblio Files Company is making plans for its next fiscal year, and decides to sell two new types of bookshelves, Basic and Deluxe. The company has compiled the following estimates for the new product offerings Type of Sales Price Variable Cost Bookshelf per Unit per Unit Basic $5.00 $1.75 Deluxe 9.00 8.10 The company is interested in determining how many of each type of bookshelf would have to be sold in order to break even. If we think of the Basic and Deluxe products as components of one overall enterprise product called "Combined," the unit contribution margin for the Combined product would be $2.31. Fixed costs for the upcoming year are estimated at $323,400. Recall that the totals of all the sales mix percents must be 100%, Determine the amounts to complete the following table. Type of Percent of Break-Even Sales Break-Even Sales Bookshelf Sales Mix in Units in Dollars Basic 9 Deluxe Target Profit Refer again to the income statements for Cover-to-Cover Company and Biblio Files Company on their respective Income Statement. Note that both companies have the same sales and net income. Answer questions (1) - (3) that follow, assuming that all data for the coming year is the same as the current year, except for the amount of sales, 1. If Cover-to-Cover Company wants to increase its profit by $30,000 in the coming year, what must their amount of sales be? 2. If Biblio Files Company wants to increase its profit by $30,000 in the coming year, what must their amount of sales be?

Answer 1

→ Ansa) Sales Mix Given. Biblio files Company Types of sales Price Bookshelf Per Unit Basic $5.00 Variable Cost Per Unit (2) $ 1.75 Contribution Margin Per vel (3)-(2) $ 3.25 Deluxe 9.00 8.10 0.90 to According Question. Combined contribution Margin Pen Unit 3 $2.31 let sales Mix be X and y fathere, is the Number of units sold of Basic y is the Number of Unil sold of Deluxe so. 3.25 X t 0.90 Y xt y 2.31 3.25 x to.goy 2.31 (x+y) 3.25 x to.goy 2.31X + 2.31 Y 3.25 X 2.31a 2.314 - 0.90 0,94 x 1.41

- = $ Х C 1.41 o.gy Х 1.50 i.es 60 % Y У. 40 % X Х 60% and y=40% or Basic 60% Deluxe 40% Then. Biblio files Company Basic Deluxe Total Explanation . Types of Bookshelf sales Price per unit $5.00 $9.00 А. Variable Cost Per Unit 1.75 8.10 B В $3.25 $0.90 Le-A-B Unit Contribution Margin laleighted average. Contributed Margin pen Unit fined costs $323,400 E. Break even for Units 0140,000 F: E Units D G Sales Mix 60% 40% .

Break even sales in Units 84,000 UW 56,000. 140,000. World H=(E)x[GX4 Unite Break - Even Sales in Dollars $ 420,000 $504,000 $984,000/I = ()x(A) Hence Answer Is Company Am Biblio files Types of Bookshell Percent of Sales Mix Break-even sales in Units Break-Even sales in Dollard Basic 60% 84,000 Units $420,000 was Deluxe Hoy 1180 56,000 Units $ 504,000 140,000 Units$924,000 Total 100% 7 1) Ausz If cover - to cover company wants to Il increase its Profit by by $30,000 in the coming Year, what must their amount of sales be? According to Given Question Cover-to- Cover Company's income Income statement is not

Per Unit Margin is Given in the . Cover Question on.covers to Contribution not mentioned in the Questions Dalore. On the basis of this Information -lon Corey -to Cover Company Ambounts is if increase ito profit by not calculated of sales $ 30,000 pis 3)Ande) Biblio files company wants to increase its Profit by $30,000 what must be their amount of sales in the coming year . to According Given Question Contribution Mueres not calculated Per Unit for Biblio files Because Company Income statement Biblio Files company is of not Given in the Question or the Existing Sales Units is also not knoon. sales Therefore, the of Biblio files company for the coming amount not calculated the basis data. of given Note last () (2) Question Please Posted Separately Alongurit Income statement. I will be Grateful to Help You. years is on

Note Not Mention in Question, Biblio filio Company Cover-tor Cover Unite sold Net saler sell Price Per Unit contribution Margin Por Unit

Note : - Target Profit problem is not calculated, because Income Statement of Both Companies Cover to Cover and Biblio Company is not Given is not given in the Question. Therefore, the data of calculation of sales amount in the coming year is not calculated.

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