Orange Company prepared the following budget information for the coming year: Product A Product B Product C Total Sales $360,000 $900,000 $700,000 $1,960,000 Variable expenses 89,000 505,000 223,000 817,000 Contribution margin $271,000 $395,000 $477,000 $1,143,000 Fixed expense 300,000 Operating income $843,000 The budget assumes the sale of 112,000 units of A, 48,000 units of B, and 80,000 units of C. Required: 1.) What is the company's break-even point (in both $ and units) given the sales mix above? 2.) How many units of each product are sold at the break even point? ( 3.) If the budgeted sales mix is maintained, what is the total contribution margin and operating income if 300,000 units are sold
Orange Company prepared the following budget information for the coming year: Product A Product B Product C Total Sales $360,000 $900,000 $700,000 $1,960,000 Variable expenses 89,000 505,000 223,000 817,000 Contribution margin $271,000 $395,000 $477,000 $1,143,000 Fixed expense 300,000 Operating income $843,000 The budget assumes the sale of 112,000 units of A, 48,000 units of B, and 80,000 units of C. Required: 1.) What is the company's break-even point (in both $ and units) given the sales mix above? 2.) How many units of each product are sold at the break even point? ( 3.) If the budgeted sales mix is maintained, what is the total contribution margin and operating income if 300,000 units are sold
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
Problem 10CE: Coral Seas Jewelry Company makes and sells costume jewelry. For the coming year, Coral Seas expects...
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
Orange Company prepared the following budget information for the coming year: Product A Product B Product C Total Sales $360,000 $900,000 $700,000 $1,960,000 Variable expenses 89,000 505,000 223,000 817,000 Contribution margin $271,000 $395,000 $477,000 $1,143,000 Fixed expense 300,000 Operating income $843,000 The budget assumes the sale of 112,000 units of A, 48,000 units of B, and 80,000 units of C. Required: 1.) What is the company's break-even point (in both $ and units) given the sales mix above? 2.) How many units of each product are sold at the break even point? ( 3.) If the budgeted sales mix is maintained, what is the total contribution margin and operating income if 300,000 units are sold
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