Answer Happy

Problem 4-20 Sales Mix; Multi-Product Break-Even Analysis [LO9] Smithen Company, a wholesale distributor, has been operating for only a few months. The company sells three products-sinks, mirrors, and vanities. Budgeted sales by product and in total for the coming month are shown below based on planned unit sales as follows: Units 1,000 Percentage 50% Sinks Mirrors 500 25% Vanities 500 25% Total 2,000 100% Sinks Product Mirrors 20% Total 100% 48% Percentage of total sales Sales Vanities 32% $360,000 100.00% $150,000 100.00% $240,000 100.00% $750,000 74,000 20.56% 41.33% 86,000 35.83% 192,150 variable expenses Contribution margin $286,000 $286.00 62,000 79.44% $ 88,000 $ 176.00 58.67% $154,000 64.17% 557,850 $ 308.00 Contribution margin per unit Fixed expenses 516,450 $ 41,400 Operating income $516,450 0.74 100.00% 25.62% 74.38% Fixed expenses Overall CM ratio = $694,339.88 Break-even point in unit sales: Total Fixed expenses $516,450 $264.00* = 1,956.25 units Weighted-average CM per unit *($286.00 x 0.50) + ($176.00 x 0.25) + ($308.00 x 0.25) As shown by these data, operating Income is budgeted at $41,400 for the month, break-even sales dollars at $694,339.88, and break- even unit sales at 1,956.25. Assume that actual sales for the month total $756,000 (2,100 units), with the CM ratio and per unit amounts the same as budgeted. Actual fixed expenses are the same as budgeted, $516,450. Actual sales by product are as follows: sinks, $189,000 (525 units); mirrors, $315,000 (1,050 units); and vanities, $252,000 (525 units). Break-even point in sales dollars
places.) Answer is not complete. SMITHEN COMPANY Contribution Margin Income Statement Product Mirrors Vanities S $ Percentage of total sales Sales 100.00 % 756,000.00 x % Is % $ 756,000.00 X % % % S 362,880.00 0.00 % S 756,000.00 0.00 % $ 756,000.00 0.00 % Operating income (loss) 2. Compute the break-even point in sales dollars for the month, based on the actual data. (Round your percentage answers to nearest whole percent. Round other intermediate values and final answer to the nearest whole dollar.) Break-even point in sales dollars 3. Calculate the break-even point in unit sales for the month, based on the actual data. (Do not round your intermediate calculations. Round your final answer to the nearest whole number.) Break-even point in unit sales S ✔S Sinks 100.00 % 362,880.00 x 100.00 % Total 100.00 % 756,000.00✔ 756,000.00 $ 756,000.00 0.00 % % %