27. Break-Even Point and Target Profit Measured in Sales Dollars (Multiple Products). Hi-Tech Incorporated produces two...

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27. Break-Even Point and Target Profit Measured in Sales Dollars (Multiple Products). Hi-Tech Incorporated produces two different products with the following monthly data (these data are the same as the previous exercise). Cell GPS Total Selling price per unit $100 $400 Variable cost per unit $ 40 $240 Expected unit sales 21,000 9,000 30,000 Sales mix 70 percent 30 percent 100 percent Fixed costs $1,800,000 Assume the sales mix remains the same at all levels of sales. Required: Round your answers to the nearest hundredth of a percent and nearest dollar where appropriate. (An example for percentage calculations is 0.434532 = 0.4345 = 43.45 percent; an example for dollar calculations is $378.9787 = $379.) 1. Using the information provided, prepare a contribution margin income statement for the month similar to the one in Figure 3.4 "Income Statement for Amy's Accounting Service". 2. Calculate the weighted average contribution margin ratio. 3. Find the break-even point in sales dollars. 4. What amount of sales dollars is required to earn a monthly profit of $540,000? 5. Assume the contribution margin income statement prepared in requirement a is the company's base case. What is the margin of safety in sales dollars? 28. Changes in Sales Mix. Hi-Tech Incorporated produces two different products with the following monthly data (these data are the same as the previous exercise). Cell GPS Total Selling price per unit $100 $400 Variable cost per unit $ 40 $240 Expected unit sales 21,000 9,000 30,000 Sales mix 70 percent 30 percent 100 percent $1,800,000 Fixed costs Required: 1. If the sales mix shifts to 50 percent Cell and 50 percent GPS, would the break-even point in units increase or decrease? Explain. (Detailed calculations are not necessary but may be helpful in confirming your answer.) 2. Go back to the original projected sales mix. If the sales mix shifts to 80 percent Cell and 20 percent GPS, would the break-even point in units increase or decrease? Explain. (Detailed calculations are not necessary but may be helpful in confirming your answer.) 28. CVP Sensitivity Analysis (Single Product). Bridgeport Company has monthly fixed costs totaling $200,000 and variable costs of $40 per unit. Each unit of product is sold for $50. Bridgeport expects to sell 30,000 units each month (this is the base case). Required: For each of the independent situations in requirements 2 through 4, assume that the number of units sold remains at 30,000. 1. Prepare a contribution margin income statement for the base case. 2. Refer to the base case. What would the operating profit be if the unit sales price increases 10 percent? 3. Refer to the base case. What would the operating profit be if the unit variable cost decreases 20 percent? 4. Refer to the base case. What would the operating profit be if total fixed costs decrease 20 percent? 27. Break-Even Point and Target Profit Measured in Sales Dollars (Multiple Products). Hi-Tech Incorporated produces two different products with the following monthly data (these data are the same as the previous exercise). Cell GPS Total Selling price per unit $100 $400 Variable cost per unit $ 40 $240 Expected unit sales 21,000 9,000 30,000 Sales mix 70 percent 30 percent 100 percent Fixed costs $1,800,000 Assume the sales mix remains the same at all levels of sales. Required: Round your answers to the nearest hundredth of a percent and nearest dollar where appropriate. (An example for percentage calculations is 0.434532 = 0.4345 = 43.45 percent; an example for dollar calculations is $378.9787 = $379.) 1. Using the information provided, prepare a contribution margin income statement for the month similar to the one in Figure 3.4 "Income Statement for Amy's Accounting Service". 2. Calculate the weighted average contribution margin ratio. 3. Find the break-even point in sales dollars. 4. What amount of sales dollars is required to earn a monthly profit of $540,000? 5. Assume the contribution margin income statement prepared in requirement a is the company's base case. What is the margin of safety in sales dollars? 28. Changes in Sales Mix. Hi-Tech Incorporated produces two different products with the following monthly data (these data are the same as the previous exercise). Cell GPS Total Selling price per unit $100 $400 Variable cost per unit $ 40 $240 Expected unit sales 21,000 9,000 30,000 Sales mix 70 percent 30 percent 100 percent $1,800,000 Fixed costs Required: 1. If the sales mix shifts to 50 percent Cell and 50 percent GPS, would the break-even point in units increase or decrease? Explain. (Detailed calculations are not necessary but may be helpful in confirming your answer.) 2. Go back to the original projected sales mix. If the sales mix shifts to 80 percent Cell and 20 percent GPS, would the break-even point in units increase or decrease? Explain. (Detailed calculations are not necessary but may be helpful in confirming your answer.) 28. CVP Sensitivity Analysis (Single Product). Bridgeport Company has monthly fixed costs totaling $200,000 and variable costs of $40 per unit. Each unit of product is sold for $50. Bridgeport expects to sell 30,000 units each month (this is the base case). Required: For each of the independent situations in requirements 2 through 4, assume that the number of units sold remains at 30,000. 1. Prepare a contribution margin income statement for the base case. 2. Refer to the base case. What would the operating profit be if the unit sales price increases 10 percent? 3. Refer to the base case. What would the operating profit be if the unit variable cost decreases 20 percent? 4. Refer to the base case. What would the operating profit be if total fixed costs decrease 20 percent?

Answer rating: 100% (QA)

27 BreakEven Point and Target Profit Measured in Sales Dollars Multiple Products 1 Contribution Margin Income Statement Item Cell GPS Total Sales 2100... View the full answer