Calculate the break even units for each product

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Reference no: EM131197417

USING A COMPUTER SPREADSHEET TO SOLVE MULTIPLEPRODUCT BREAK-EVEN, VARYING SALES MIX

The following projected income statement for More-Power Company is repeated for your convenience. Recall that the projection is based on sales of 75,000 regular sanders and 30,000 mini-sanders.

	Regular
	Sander	Mini-Sander	Total
Sales	$3,000,000	$1,800,000	$4,800,000
Less: Variable expenses	1,800,000	900,000	2,700,000
Contribution margin	$1,200,000	$ 900,000	$2,100,000
Less: Direct fixed expenses Product margin	250,000	450,000	700,000
Less: Direct fixed expenses Product margin	$ 950,000	$ 450,000	$1,400,000
Less: Common fixed expenses			600,000
Operating income			$ 800,000

Required:
1. Set up the given income statement on a spreadsheet (e.g., Excel^TM). Then, substitute the following sales mixes, and calculate operating income. Be sure to print the results for each sales mix (a through d).

	Regular Sander	Mini-Sander
a.	75,000	37,500
b.	60,000	60,000
c.	30,000	90,000
d.	30,000	60,000

2. Calculate the break-even units for each product for each of the preceding sales mixes.

Reference no: EM131197417

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