Vandenberg, Inc., produces and sells two products: a ceiling fan and a table fan. Vandenberg plans to sell 40,000 ceiling fans and 60,000 table fans in the coming year. Product price and cost information includes:
| Ceiling Fan | Table Fan | ||||||
| Price | $60 | $13 | |||||
| Unit variable cost | $13 | $7 | |||||
| Direct fixed cost | $24,600 | $47,000 | |||||
Common fixed selling and administrative expenses total $96,000.
Required:
1. What is the sales mix estimated for next year (calculated to the lowest whole number for each product)?
Sales mix of ceiling fans to table fans =
2. Using the sales mix from Requirement 1, form a package of ceiling fans and table fans. How many ceiling fans and table fans are sold at break-even? Round your intermediate calculations and final answers to the nearest whole number.
| Break-even ceiling fans | |
| Break-even table fans |
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Cornerstone Exercise 16.5 (Algorithmic) Multiple-Product Break-Even and Target Profit Vandenberg, Inc., produces and sells two products:...
Cornerstone Exercise 16.5 (Algorithmic)
Multiple-Product Break-Even and Target Profit
Vandenberg, Inc., produces and sells two products: a ceiling fan
and a table fan. Vandenberg plans to sell 40,000 ceiling fans and
80,000 table fans in the coming year. Product price and cost
information includes:
Ceiling Fan
Table Fan
Price
$58
$13
Unit variable cost
$16
$9
Direct fixed cost
$22,400
$47,000
Common fixed selling and administrative expenses total
$86,000.
Required:
1. What is the sales mix estimated for next
year...
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