Pin Cushion Company produces two models of sewing basket. Information about Pin Cushion's products is given...

Question

Question

Pin Cushion Company produces two models of sewing basket. Information about Pin Cushions products is given below: Sales reve

Determine Pin Cushions weighted average unit contribution margin and weighted average contribution margin ratio. (Round your

Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Calculate Pin Cushions break-even units and break-even sal

Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Calculate the number of units of each product that must be

Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Calculate the total sales necessary for Pin Cushion to earn

Complete this question by entering your answers in the tabs below. oints Required 6 Required 4 Required 5 Required 3 Required

Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Req

business accounting

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

Pin Cushion Company

Total sales = 29,000 + 44,000 = 73,000

Sales mix,

Product A = 29,000/73,000 = 0.40

Product B = 44,000/73,000 = 0.60

Contribution per unit,

Product A = $ 17,200/800 units = $ 21.5

Product B = $ 23,800/1840 units = $ 12.93

Contribution margin ratio,

Product A = 17,200/29,000 = 59.3%

Product B = 23,800/44,000 = 54.1%

1) weighted average contribution margin per unit, contribution margin per unit × sales mix

= ($21.5 × 0.4) + ($12.93 × 0.6) = $ 16.36

Weighted average contribution margin ratio, contribution margin ratio × sales mix

= (59.3% × 0.4) + (54.1% × 0.6) = 56.18%

2) Break even sales units = Fixed cost / weighted average contribution margin per unit

= $ 35,500/16.36 = 2,170 units

Break even sales revenue = Fixed cost / weighted average contribution margin ratio

= $ 35,500/56.18% = $ 63,189.75

3) Break even sales units, Break even sales units × sales mix

Product A = 2,170 units × 0.4 = 868 units

Product B = 2,170 units × 0.6 = 1,302 units

4) targeted sales revenue = (Fixed cost + targeted profit) / weighted average contribution margin ratio

= (35,500+63,400)/56.18%

= $ 176,041.30

5) targeted sales revenue, Break even sales × sales mix

Product A = $ 176,041.3 × 0.4 = $ 70,416.52

Product B = $ 176,041.3 × 0.6 = $ 105,624.78

6) Degree of operating leverage = contribution margin / net income

= (17,200+23,800)/(41,000-35,500)

= 41,000/5,500 = 7.45

Add a comment

Answer 2

Similar Homework Help Questions

Pin Cushion Company produces two models of sewing basket. Information about Pin Cushion's products is given...

Pin Cushion Company produces two models of sewing basket. Information about Pin Cushion's products is given below: Sales revenue Less: Variable costs Contribution margin Total units sold Product $35,880 : 14,280 $20,800 920 Product B $58,888 22,688 $27,408 1.960 Pin Cushion's fixed costs total $37,300. Required: 1. Determine Pin Cushion's weighted average unit contribution margin and weighted average contribution margin ratio. 2. Calculate Pin Cushion's break-even units and break-even sales revenue. 3. Calculate the number of units of each product...
Lindstrom Company produces two fountain pen models. Information about its products follows: Product A Product B...

Lindstrom Company produces two fountain pen models. Information about its products follows: Product A Product B Sales revenue $ 100,000 $ 150,000 Less: Variable costs 39,000 52,500 Contribution margin $ 61,000 $ 97,500 Total units sold 5,000 5,000 Lindstrom’s fixed costs total $81,000. Required: 1. Determine Lindstrom’s weighted-average unit contribution margin and weighted-average contribution margin ratio. 2. Calculate Lindstrom’s break-even point in units and in sales revenue. 3. Calculate the number of units that Lindstrom must sell to earn a...
Lindstrom Company produces two fountain pen models. Information about its products follows: Sales revenue Less: Variable...

Lindstrom Company produces two fountain pen models. Information about its products follows: Sales revenue Less: Variable costs Contribution margin Total units sold Product A $ 165,000 72,600 $ 92,400 5,000 Product B $215,000 60,200 $154,800 5,000 Lindstrom’s fixed costs total $87,500. Required: 1. Determine Lindstrom's weighted-average unit contribution margin and weighted-average contribution margin ratio. 2. Calculate Lindstrom's break-even point in units and in sales revenue. 3. Calculate the number of units that Lindstrom must sell to earn a $130,000 profit....

Lindstrom Company produces two fountain pen models. Information about its products follows: Product A Product B...

Lindstrom Company produces two fountain pen models. Information about its products follows: Product A Product B Sales revenue $ 125,000 $ 200,000 Less: Variable costs 52,000 50,000 Contribution margin $ 73,000 $ 150,000 Total units sold 5,000 5,000 Lindstrom’s fixed costs total $83,500. 1. Determine Lindstrom’s weighted-average unit contribution margin and weighted-average contribution margin ratio. (Round your weighted-average CM to 2 decimal places and Weighted-Average CM Ratio to 1 decimal place (i.e. .123 should be entered as 12.3%)). 2.Calculate Lindstrom’s...
Contribution Margin, Break-Even Units, Break-Even Sales, Margin of Safety, Degree of Operating Leverage Aldovar Company produces...

Contribution Margin, Break-Even Units, Break-Even Sales, Margin of Safety, Degree of Operating Leverage Aldovar Company produces a variety of chemicals. One division makes reagents for laboratories. The division's projected income statement for the coming year is: Sales (203,000 units @ $70) $14,210,000 Total variable cost 8,120,000 Contribution margin $6,090,000 Total fixed cost 4,945,500 Operating income $1,144,500 Required: 1. Compute the contribution margin per unit, and calculate the break-even point in units. Calculate the contribution margin ratio and use it to...
Contribution Margin, Break-Even Units, Break-Even Sales, Margin of Safety, Degree of Operating Leverage Aldovar Company produces...

Contribution Margin, Break-Even Units, Break-Even Sales, Margin of Safety, Degree of Operating Leverage Aldovar Company produces a variety of chemicals. One division makes reagents for laboratories. The division's projected income statement for the coming year is: Sales (203,000 units @ $70) $14,210,000 Total variable cost 8,120,000 Contribution margin $6,090,000 Total fixed cost 4,945,500 Operating income $1,144,500 Required: 1. Compute the contribution margin per unit, and calculate the break-even point in units. Calculate the contribution margin ratio and use it to...

Hermosa, Inc., produces one model of mountain bike. Partial information for the company follows: 470 778...

Hermosa, Inc., produces one model of mountain bike. Partial information for the company follows: 470 778 940 $109,989 $ ? Number of bikes produced and sold Total costs Variable costs Fixed costs per year Total costs Cost per unit Variable cost per unit Fixed cost per unit Total cost per unit $ 525.75 Required: 1. Complete the table. 2. Calculate Hermosa's contribution margin ratio and its total contribution margin at each sales level indicated in the table assuming the company...
Problem 4-14 Culver Tennis Racquet Co. produces and sells three models: Units sold Sales Less variable...

Problem 4-14 Culver Tennis Racquet Co. produces and sells three models: Units sold Sales Less variable costs Contribution margin Less common fixed costs Profit Smasher 2,000 $160,300 73,800 $86,500 Basher 3,200 $168,100 69,600 $98,500 Dinker 3 ,200 $117,400 35,600 $81,800 Total 8,400 $445,800 179,000 266,800 141,900 $124,900 What is the weighted average contribution margin per unit? (Round answer to 2 decimal places, e.g. 15.25.) Weighted average contribution margins per unit LINK TO TEXT Calculate the break-even point in units assuming...
The section of Waterways that produces controllers for the company provided the following information. Sales in...

The section of Waterways that produces controllers for the company provided the following information. Sales in units for month of February 4,100 Variable manufacturing cost per unit $9.00 Sales price per unit $42.00 Fixed manufacturing overhead cost (per month for controllers) $80,000 Variable selling and administrative expenses per unit $3.60 Fixed selling and administrative expenses (per month for controllers) $12,400 Using this information for the controllers, determine the contribution margin ratio, the degree of operating leverage, the break-even point in...

Texas-Q Company produces and sells barbeque grills. Texas-Q sells three models: a small portable gas grill,...

Texas-Q Company produces and sells barbeque grills. Texas-Q sells three models: a small portable gas grill, a larger stationary gas grill, and the specialty smoker. In the coming year, Texas-Q expects to sell 19,600 portable grills, 44,100 stationary grills, and 4,900 smokers. Information on the three models is as follows: Stationary Portable $86 Smokers $245 Price $198 Variable cost per unit - 43 126 144 Total fixed cost is $2,026,200. Required: 1. What is the sales mix of portable grills...

Pin Cushion Company produces two models of sewing basket. Information about Pin Cushion's products is given...

Homework Answers

Add Answer to:
Pin Cushion Company produces two models of sewing basket. Information about Pin Cushion's products is given...

Post as a guest

Earn Coins