Smithen Company, a wholesale distributor, has been operating for only a few months. The company sells...
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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: Sinks Mirrors Vanities Total Units Percentage 1,000 50% 500 25% 500 25% 2,000 100% Percentage of total sales Sales Variable expenses Contribution margin Contribution margin per unit Fixed expenses Operating income Break-even point in sales dollars Break-even point in unit sales: Total Fixed expenses: Weighted-average CM per unit Sinks 48% $408,000 100.00 % 80,000 19.61 % 80.39% $328,000 $ 328.00 Product Mirrors Vanities 32% 20% $170,000 100.00% $272,000 100.00 % 66,000 38.82% 90,000 33.09% $104,000 61.18% $182,000 66.91% 645,700 $ 208.00 $364.00 Fixed expenses Overall CM ratio $602,300 $307.00* *($328.00 x 0.50) + ($208.00 x 0.25) + ($364.00 x 0.25) $602,300 0.76 = 1,961.89 units. Total 100% $850,000 100.00% 204,300 24.04% 75.96% 602,300 $ 43,400 = $792,868.21 As shown by these data, operating income is budgeted at $43,400 for the month, break-even sales dollars at $792,868.21, and break- even unit sales at 1,961.89. Assume that actual sales for the month total $856,800 (2,100 units), with the CM ratio and per unit amounts the same as budgeted. Actual fixed expenses are the same as budgeted, $602,300. Actual sales by product are as follows: sinks, $214,200 (525 units); mirrors, $357,000 (1,050 units); and vanities, $285,600 (525 units). Required: 1. Prepare a contribution format income statement for the month based on actual sales data. (Round your answers to 2 decimal places.) Percentage of total sales Sales Variable expenses Contribution margin Fixed expenses Operating income (loss) Break-even point in sales dollars $ $ $ Break-even point in unit sales Sinks 25.00 % 214,200.00 42,004.62 172.195.38 SMITHEN COMPANY Contribution Margin Income Statement Product $ 100.00 % $ 19.61 % S 80.39 % S 1,441 Mirrors 41.67 % 357,000.00 145.575.00 211,425.00 100.00 % 38.82 % 61.18 % Vanities 33.33 % 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.) $ $ 285,600.00 $ 94,505.04 $ 191,094.96 100.00 % 33.09 % 66.91 % $ Total 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.) 100.00 % 856,800.00 650.825.28 205,974.72 602,300.00 (396,325.28) 100.00 % 24.04 % 75.96 % 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: Sinks Mirrors Vanities Total Units Percentage 1,000 50% 500 25% 500 25% 2,000 100% Percentage of total sales Sales Variable expenses Contribution margin Contribution margin per unit Fixed expenses Operating income Break-even point in sales dollars Break-even point in unit sales: Total Fixed expenses: Weighted-average CM per unit Sinks 48% $408,000 100.00 % 80,000 19.61 % 80.39% $328,000 $ 328.00 Product Mirrors Vanities 32% 20% $170,000 100.00% $272,000 100.00 % 66,000 38.82% 90,000 33.09% $104,000 61.18% $182,000 66.91% 645,700 $ 208.00 $364.00 Fixed expenses Overall CM ratio $602,300 $307.00* *($328.00 x 0.50) + ($208.00 x 0.25) + ($364.00 x 0.25) $602,300 0.76 = 1,961.89 units. Total 100% $850,000 100.00% 204,300 24.04% 75.96% 602,300 $ 43,400 = $792,868.21 As shown by these data, operating income is budgeted at $43,400 for the month, break-even sales dollars at $792,868.21, and break- even unit sales at 1,961.89. Assume that actual sales for the month total $856,800 (2,100 units), with the CM ratio and per unit amounts the same as budgeted. Actual fixed expenses are the same as budgeted, $602,300. Actual sales by product are as follows: sinks, $214,200 (525 units); mirrors, $357,000 (1,050 units); and vanities, $285,600 (525 units). Required: 1. Prepare a contribution format income statement for the month based on actual sales data. (Round your answers to 2 decimal places.) Percentage of total sales Sales Variable expenses Contribution margin Fixed expenses Operating income (loss) Break-even point in sales dollars $ $ $ Break-even point in unit sales Sinks 25.00 % 214,200.00 42,004.62 172.195.38 SMITHEN COMPANY Contribution Margin Income Statement Product $ 100.00 % $ 19.61 % S 80.39 % S 1,441 Mirrors 41.67 % 357,000.00 145.575.00 211,425.00 100.00 % 38.82 % 61.18 % Vanities 33.33 % 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.) $ $ 285,600.00 $ 94,505.04 $ 191,094.96 100.00 % 33.09 % 66.91 % $ Total 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.) 100.00 % 856,800.00 650.825.28 205,974.72 602,300.00 (396,325.28) 100.00 % 24.04 % 75.96 %
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Related Book For
Managerial Accounting
ISBN: 978-1259024900
9th canadian edition
Authors: Ray Garrison, Theresa Libby, Alan Webb
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