The Ogden Company retails two products: a standard and a deluxe version of a luggage carrier....
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The Ogden Company retails two products: a standard and a deluxe version of a luggage carrier. The budgeted income statement for next period is as follows: (Click the icon to view the budgeted income statement.) Read the requirements. Requirement 1. Compute the breakeven point in units, assuming that the company achieves its planned sales mix. Begin by determining the sales mix. For every 1 deluxe unit(s) sold, standard units are sold. Determine the formula used to calculate the breakeven point when there is more than one product sold. Then, enter the amounts in the formula to calculate the breakeven point. + = Breakeven point in bundles + = The breakeven point is standard units and deluxe units. Requirement 2. Compute the breakeven point in units (a) if only standard carriers are sold and (b) if only deluxe carriers are sold. (a) If only standard carriers are sold, the breakeven point is units. (b) If only deluxe carriers are sold, the breakeven point is units. Requirement 3. Suppose 250,000 units are sold but only 50,000 of them are deluxe. Compute the operating income. Compute the breakeven point in units. Compare your answer with the answer to requirement 1. What is the major lesson of this problem? Compute the operating income if 250,000 units are sold but only 50,000 of them are deluxe. Standard Carrier Deluxe Carrier Total Units sold Revenues at $28 and $50 per unit Variable costs at $18 and $30 per unit Contribution margin Fixed costs Operating income Before calculating the breakeven points, determine the new sales mix. For every 1 deluxe carrier sold, standard carriers are sold. Compute the breakeven point in units, assuming the new sales mix. (Round your answers up to the next whole number.) Choose from any list or enter any number in the input fields and then continue to the next question. Variable costs at $18 and $30 per unit Contribution margin Fixed costs Operating income Before calculating the breakeven points, determine the new sales mix. For every 1 deluxe carrier sold, standard carriers are sold. Compute the breakeven point in units, assuming the new sales mix. (Round your answers up to the next whole number.) The breakeven point is standard units and deluxe units. Compare your answer with the answer to requirement 1. What is the major lesson of this problem? The major lesson of this problem is that changes in the sales mix change In this example, the budgeted and actual total sales in number of units were identical, but the proportion of the product having the contribution margin declined. Operating income and the breakeven point Choose from any list or enter any number in the input fields and then continue to the next question. 7 Data Table Standard Carrier Deluxe Carrier 187,500 62,500 Units sold Revenues at $28 and $50 per unit $ 5,250,000 $ 3,125,000 $ 3,375,000 1,875,000 Variable costs at $18 and $30 per unit 1,875,000 $ 1,250,000 Contribution margins at $10 and $20 per unit Fixed costs Operating income Print Done $ Total 250,000 8,375,000 5,250,000 3,125,000 2,250,000 875,000 The Ogden Company retails two products: a standard and a deluxe version of a luggage carrier. The budgeted income statement for next period is as follows: (Click the icon to view the budgeted income statement.) Read the requirements. Requirement 1. Compute the breakeven point in units, assuming that the company achieves its planned sales mix. Begin by determining the sales mix. For every 1 deluxe unit(s) sold, standard units are sold. Determine the formula used to calculate the breakeven point when there is more than one product sold. Then, enter the amounts in the formula to calculate the breakeven point. + = Breakeven point in bundles + = The breakeven point is standard units and deluxe units. Requirement 2. Compute the breakeven point in units (a) if only standard carriers are sold and (b) if only deluxe carriers are sold. (a) If only standard carriers are sold, the breakeven point is units. (b) If only deluxe carriers are sold, the breakeven point is units. Requirement 3. Suppose 250,000 units are sold but only 50,000 of them are deluxe. Compute the operating income. Compute the breakeven point in units. Compare your answer with the answer to requirement 1. What is the major lesson of this problem? Compute the operating income if 250,000 units are sold but only 50,000 of them are deluxe. Standard Carrier Deluxe Carrier Total Units sold Revenues at $28 and $50 per unit Variable costs at $18 and $30 per unit Contribution margin Fixed costs Operating income Before calculating the breakeven points, determine the new sales mix. For every 1 deluxe carrier sold, standard carriers are sold. Compute the breakeven point in units, assuming the new sales mix. (Round your answers up to the next whole number.) Choose from any list or enter any number in the input fields and then continue to the next question. Variable costs at $18 and $30 per unit Contribution margin Fixed costs Operating income Before calculating the breakeven points, determine the new sales mix. For every 1 deluxe carrier sold, standard carriers are sold. Compute the breakeven point in units, assuming the new sales mix. (Round your answers up to the next whole number.) The breakeven point is standard units and deluxe units. Compare your answer with the answer to requirement 1. What is the major lesson of this problem? The major lesson of this problem is that changes in the sales mix change In this example, the budgeted and actual total sales in number of units were identical, but the proportion of the product having the contribution margin declined. Operating income and the breakeven point Choose from any list or enter any number in the input fields and then continue to the next question. 7 Data Table Standard Carrier Deluxe Carrier 187,500 62,500 Units sold Revenues at $28 and $50 per unit $ 5,250,000 $ 3,125,000 $ 3,375,000 1,875,000 Variable costs at $18 and $30 per unit 1,875,000 $ 1,250,000 Contribution margins at $10 and $20 per unit Fixed costs Operating income Print Done $ Total 250,000 8,375,000 5,250,000 3,125,000 2,250,000 875,000
Expert Answer:
Answer rating: 100% (QA)
requirement 1 computation of break even point in units assuming compa... View the full answer
Related Book For
Horngrens Financial and Managerial Accounting
ISBN: 978-0133255584
4th Edition
Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura
Posted Date:
Students also viewed these accounting questions
-
Presencia Equipajes SA retails two products, a standard and a deluxe version of a luggage carrier. The budgeted income statement is as follows: Required 1. Calculate the breakeven point in units,...
-
Examine the following charts LOADING Click the icon to view the gross profit percentages of Under Armour Inc and Nike Inc in 2014 LOADING Click the icon to view the inventory turnover rates of Under...
-
Dickinson Company prepared the following budgeted income statement for 2015: Requirements 1. Prepare a budgeted income statement with columns for 800 units, 1,000 units, and 1,200 units sold. 2. How...
-
Consider the pistoncylinder assembly containing a pure gas shown below. The initial volume of the gas is 0.05 m3, the initial pressure is 1 bar, and the cross-sectional area of the piston is 0.1 m2....
-
Each problem on an exam is worth 20 points. Suppose that from the last seconds you devoted to Problem 10 on the exam you earned 2 extra points, while from the last seconds devoted to Problem 8 you...
-
Astro Company sold 23,500 units of its only product and reported income of $186,000 for the current year. During a planning session for next year's activities, the production manager notes that...
-
Betsy is interested in predicting how many 75 -year-olds will develop Alzheimer's disease and is using as predictors level of education and general physical health graded on a scale from 1 to 10 ....
-
Flight Caf is a company that prepares in-flight meals for airlines in its kitchen located next to the local airport. The companys planning budget for July appears below: In July, 17,800 meals were...
-
Describe the role of the kernel in managing networking operations. How does the kernel handle packet routing, filtering, and network protocol stack operations, and what mechanisms are used to ensure...
-
A natural gas trading company wants to develop an optimal trading plan for the next 10 days. The following table summarizes the estimated prices (per thousand cubic feet (cf)) at which the company...
-
A stock had returns of 8%, 14%, and 2% for the past three years. Assuming these annual returns are normally distributed, what is the probability that this stock will earn at least 20% in any one...
-
Describe a sample organizational process governance structure.
-
List the five mystification factors and their relationship to reality.
-
Describe the six aspects of strategy and execution governance.
-
Why is matching the organizational design to business processes important?
-
What is usually the best method to create the TOM components?
-
Rearrange the code to keep a passenger manifest and not allow boarding if the van is full. Full screen A shuttle van picks up passengers and drives them to a destination, where they all leave the...
-
Derive Eq. (18.33) from Eq. (18.32).
-
Miracle Printers (MP) manufactures printers. Assume that MP recently paid $ 600,000 for a patent on a new laser printer. Although it gives legal protection for 20 years, the patent is expected to...
-
On December 31, 2014, when the market interest rate is 6%, OBrien Realty issues $ 800,000 of 7.25%, 10-year bonds payable. The bonds pay interest semiannually. OBrien Realty received $ 874,662 in...
-
Use the following information for a manufacturer to compute cost of goods manufactured and cost of goodssold: Beginning Ending Inventories: Raw Materials Work-in-Process Finished Goods Other...
-
Document the CRC card for the temptation EBT.
-
What are the classes and patterns involved in defining the stable pattern for temptation?
-
Is the temptation pattern incomplete without the use of other patterns? Explain briefly.
Study smarter with the SolutionInn App