Question 2) The Crazy Chair Corporation sells four different colors of chairs (Red, White, Blue, and...

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Question 2) The Crazy Chair Corporation sells four different colors of chairs (Red, White, Blue, and Black). Keegan, their accountant, has determined that 45,000 red chairs, 165,000 white chairs, 30,000 blue chairs, and 105,000 black chairs would be sold in the next period. He also came up with the following cost information for each product: . Red: $31.50 variable cost per unit and a 40% contribution margin ratio; fixed costs are $275,572.66. 2. 3. White: $23.10 price per unit and the contribution margin per unit is 4.5 times greater than the variable cost per unit; fixed costs are combined with Blue and total $777,777.77. Blue: $22 price per unit and a 52% variable cost ratio; fixed costs are combined with White. Black: $36.88 price per unit and a $16.75 contribution margin per unit; fixed costs are $530,115.20. Required: 1. Assuming the company maintains its current sales mix, what would be the company's breakeven point in units per product and in total? What is operating income at the current level of sales (show an income statement)? What would operating income be if the company sold 56.78% fewer units of Blue and 67.88% fewer units of White, but was able to increase sales of Red and Black by 111.24% (show an income statement)? Question 2) The Crazy Chair Corporation sells four different colors of chairs (Red, White, Blue, and Black). Keegan, their accountant, has determined that 45,000 red chairs, 165,000 white chairs, 30,000 blue chairs, and 105,000 black chairs would be sold in the next period. He also came up with the following cost information for each product: . Red: $31.50 variable cost per unit and a 40% contribution margin ratio; fixed costs are $275,572.66. 2. 3. White: $23.10 price per unit and the contribution margin per unit is 4.5 times greater than the variable cost per unit; fixed costs are combined with Blue and total $777,777.77. Blue: $22 price per unit and a 52% variable cost ratio; fixed costs are combined with White. Black: $36.88 price per unit and a $16.75 contribution margin per unit; fixed costs are $530,115.20. Required: 1. Assuming the company maintains its current sales mix, what would be the company's breakeven point in units per product and in total? What is operating income at the current level of sales (show an income statement)? What would operating income be if the company sold 56.78% fewer units of Blue and 67.88% fewer units of White, but was able to increase sales of Red and Black by 111.24% (show an income statement)?

Answer rating: 100% (QA)

To answer your questions lets calculate the breakeven point operating income at the current level of sales and the operating income with the given changes in sales 1 Breakeven Point To calculate the b... View the full answer