Assume Annie’s Homemade divides its total annual sales of $650,000 into two sales channels: in-store sales and mobile sales. The in-store sales comprise 65% of total sales and the mobile sales account for 35% of total sales. The variable expense ratio is 30% for in-store sales and 40% for mobile sales. Variable expenses are a higher percentage of sales in the mobile sales segment because of various factors, such as price discounts offered to high-volume customers, packaging costs, and incremental fuel costs. Of the company’s total annual fixed expenses of $240,000, $10,000 is traceable to in-store sales, $15,000 is traceable to mobile sales, and the remainder are common fixed expenses. The common fixed expenses—the three largest of which include employee-salaries($120,000), equipment depreciation ($40,000), and store rent ($36,000)—would be avoidable only if the company went out of business

1. Prepare a contribution format segmented income statement that divides Annie’s Homemade’s total sales into two sales channels: in-store sales and mobile sales.
2. For the mobile sales segment:

a. What is the break-even point in dollar sales?

b. Assuming an average selling price of $4.50 per serving, what is the break-even point in number of servings (round your answer up to the nearest whole number)?

1. For the in-store segment:

a. What is the break-even point in dollar sales (rounded to the nearest dollar)?

b. If the in-store segment’s unit sales grow by 5% and all else holds constant, then what would be the impact on profits (rounded to the nearest dollar)?
 
 

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2. For the mobile sales segment: a. What is the break-even point in dollar sales? b. Assuming an average selling price of $4.50 per serving, what is the break-even point in number of servings (round your answer up to the nearest whole number)? 3. For the in-store segment: a. What is the break-even point in dollar sales (rounded to the nearest dollar)? b. If the in-store segment's unit sales grow by 5% and all else holds constant, then what would be the impact on profits (rounded to the nearest dollar)? Complete this question by entering your answers in the tabs below. Requirement 1 Requirement Requirement Requirement 2a 2b 3a Prepare a contribution format segmented income statement that divides Annie's Homemade's total sales into two sales channels: in-store sales and mobile sales. Sales Variable expenses Contribution margin Traceable fixed expenses Segment margin Common fixed expenses Net operating income Total Company $ $ 0 0 0 Prev Requirement 3b $ In-Store 3 of 3 0 0 GA Mobile Next 0 0 2. For the mobile sales segment: a. What is the break-even point in dollar sales? b. Assuming an average selling price of $4.50 per serving, what is the break-even point in number of servings (round your answer up to the nearest whole number)? 3. For the in-store segment: a. What is the break-even point in dollar sales (rounded to the nearest dollar)? b. If the in-store segment's unit sales grow by 5% and all else holds constant, then what would be the impact on profits (rounded to the nearest dollar)? Complete this question by entering your answers in the tabs below. Requirement 1 Requirement Requirement Requirement 2a 2b 3a Prepare a contribution format segmented income statement that divides Annie's Homemade's total sales into two sales channels: in-store sales and mobile sales. Sales Variable expenses Contribution margin Traceable fixed expenses Segment margin Common fixed expenses Net operating income Total Company $ $ 0 0 0 Prev Requirement 3b $ In-Store 3 of 3 0 0 GA Mobile Next 0 0

Answer rating: 100% (QA)

Step 1 of 4 The breakeven point is the point in a manufacturing process when revenues and expenses are equal ie at the breakeven point profit or loss is zero It is computed to determine the changes in ... View the full answer