Question: Does anyone know how to do 2 and 3? Thank you! Question 2) The Schwindenhammer Company has three product lines of mugs-A, B, and C-
Question 2) The Schwindenhammer Company has three product lines of mugs-A, B, and C- with sales prices of S20, S6.40, and S8, respectively. Liz, the president, foresees sales of 168,000 units in the coming period, consisting of 24,000 units of A, 96,000 units of B, and 48,000 units of C. The company's fixed costs for the period are $405,000, Liz also informed you that mug A has a variable cost rtio of 75%, mug B has a contribution margin ratio of 62.50%, and mug C has a variable cost of SS. Required 1. What is the company's breakeven point in units (per product and in total), assuming that the given sales mix is maintained? 2. If the sales mix is maintained, what is the operating income when 168,000 units are sold? 3. What would operating income be if the company sold 24,000 units of A, 48,000 units of B, and 96,000 units of C? what is thenew breakeven point in units (per product and in total) if the relationships in part #3 persist in the next period? 4, Question 3) Murphy Company's controller, Colleen, prepared the following budgeted income statement for the coming year: Sales Total variable cost $1,037,500 280.125 S757,375 523.483 Contribution margin Total fixed cost Operating income Required. I. Suppose Murphy's actual revenues are 34% more than budgeted. By how much (give dollar amount) will operating income increase? Prepare a contribution margin income statement at the break-even level of sales. What is Murphy's expected margin of safety? 2. 3
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