Question: Multiple Products, Break - Even Analysis, Operating LeverageCarlyle Lighting Products produces two different types of lamps: a floor lamp and a desk lamp. Floor lamps
Multiple Products, BreakEven Analysis, Operating LeverageCarlyle Lighting Products produces two different types of lamps: a floor lamp and a desk lamp. Floor lamps sell for $ and desk lamps sell for $ The projected income statement for the coming year follows:Sales$Total variable costContribution margin$Total fixed costOperating income$The owner of Carlyle estimates that of the sales revenues will be produced by floor lamps and the remaining by desk lamps. Floor lamps are also responsible for of the variable cost. Of the fixed cost, onethird is common to both products, and onehalf is directly traceable to the floor lamp product line.Required: Compute the sales revenue that must be earned for Carlyle to break even. Round the contribution margin ratio to six decimals and sales revenue to the nearest dollar.$fill in the blank Compute the number of floor lamps and desk lamps that must be sold for Carlyle to break even. Round variable rates and contribution margins to four decimal places in your calculations. Round the final answers to the nearest whole dollar.Floor lampsfill in the blank unitsDesk lampsfill in the blank units Compute the degree of operating leverage for Carlyle.fill in the blank Now assume that the actual revenues will be higher than the projected revenues. By what percentage will profits increase with this change in sales volume?fill in the blank
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
