CLICK HERE TO REVIEW LEARNING OBJECTIVES QUESTION S Incorrect 0.00 points out of
ID: 2402751 • Letter: C
Question
CLICK HERE TO REVIEW LEARNING OBJECTIVES QUESTION S Incorrect 0.00 points out of 3.00Flag question Multiple Product Break-Even and Net Income Planning Grand Company manufactures and sells the following three products: Economy Standard Deluxe Unit sales Unit sales price Unit variable cost 10,000 6,000 4,000 50 $58 $70 $30 532 $36 Assume that total fixed cost is $344.400. a. Compute the net income before income tax based on the sales volumes shown above. Economy Standard Deluxe Unit contribution margin s X $ Total contribution margin Net income before income tax: S b. Compute the break-even point in total dollars of revenue and in specific unit sales volume for each product. Enter product mix answers in decimal form. bution Margin per unic Weighted average unit contribution margin Product Product MixContri EconoExplanation / Answer
a. Economy Standard Deluxe Unit Contribution Margin $ 20 $ 26 $ 34 Total Contributon Margin $ 2,00,000 $ 1,56,000 $ 1,36,000 Net Income before income tax $ 1,47,600 Working: Economy Standard Deluxe Total Unit sales price $ 50 $ 58 $ 70 Unit Variable costs $ 30 $ 32 $ 36 Unit Contribution Margin $ 20 $ 26 $ 34 Unit sales 10,000 6,000 4,000 Total Contribution Margin $ 2,00,000 $ 1,56,000 $ 1,36,000 $ 4,92,000 Less:Fixed costs $ 3,44,400 Net Income before Income Tax $ 1,47,600 b. Product Product Mix Contribution Margin per unit Weighted Average unit contribution margin Economy 0.443 $ 20 $ 8.87 Standard 0.309 $ 26 $ 8.02 Deluxe 0.248 $ 34 $ 8.44 Total $ 25.33 Break even units 13,599 Units Product Break even units Unit Sales price Break even Sales revenue Economy 6,028 $ 50 $ 3,01,386 Standard 4,195 $ 58 $ 2,43,327 Deluxe 3,376 $ 70 $ 2,36,287 Working: 1) Product Unit sales Unit sales price Total Sales Product Mix Economy 10,000 $ 50 $ 5,00,000 0.443 Standard 6,000 $ 58 $ 3,48,000 0.309 Deluxe 4,000 $ 70 $ 2,80,000 0.248 Total $ 11,28,000 1.000 2) Product Break even units-Combined Product Mix Break even units Economy 13,599 0.443 6,028 Standard 13,599 0.309 4,195 Deluxe 13,599 0.248 3,376 c) Product Break even units Unit Contribution Margin Total Contribution Margin Economy 6,028 $ 20 $ 1,20,554 Standard 4,195 $ 26 $ 1,09,078 Deluxe 3,376 $ 34 $ 1,14,768 Total $ 3,44,400 Total Contribution margin is equal to Fixed costs .So, Above calculations are correct about break even etc.