Manatoah Manufacturing produces 3 models of window air conditioners: model 101, model 201, and model 301. The
Question:
Manatoah Manufacturing produces 3 models of window air conditioners: model 101, model 201, and model 301. The sales price and variable costs for these three models are as follows:
Product | Sales Price per Unit | Variable Cost per Unit |
Model 101 | $275 | $190 |
Model 201 | 345 | 220 |
Model 301 | 405 | 250 |
The current product mix is 4:3:2. The three models share total fixed costs of $512,500.
Question Content Area
A. Calculate the sales price per composite unit.
Sales price $______ per composite unit
B. What is the contribution margin per composite unit?
Contribution margin $________ per composite unit
C. Calculate Manatoah’s break-even point in both dollars and units.
Break-even point in dollars $_______
Break-even point in units ______ units
D. Using an income statement format, prove that this is the break-even point. If an amount is zero, enter "0".
Income Statement | |
Sales | --------------- |
Model 101 | $ |
Model 201 | |
Model 301 | |
Total Sales | $ |
Variable Costs | --------------- |
Model 101 | $ |
Model 201 | |
Model 301 | |
Total Variable Costs | $ |
Contribution Margin | $ |
Fixed Costs | |
Net Income | $ |
Managerial Accounting
ISBN: 978-0078025518
2nd edition
Authors: Stacey Whitecotton, Robert Libby, Fred Phillips