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Problem 3-25A (Algo) Determining the break-even point and margin of safety for a company with multiple products LO 3-6 Rooney Company produces two products. Budgeted annual income statements for the two products are provided as follows. Power Lite Total Budgeted Per Budgeted Budgeted Per Budgeted Budgeted Budgeted Number Unit @ $ 700 = $168,000 e 380 =(91,200) @ 320 = Unit @ $ 570 = $ 319,200 e 300 = (168,000) @ 270 = Number Amount $ 487,200 (259,200) 228,000 (114,000) Amount Number Amount Sales 240 560 800 Variable cost 240 560 800 Contribution margin 240 76,800 (19,000) $ 57,800 151,200 (95,000) 560 800 Fixed cost Net income $ 56,200 $ 114,000 Required: a. Based on budgeted sales, determine the relative sales mix between the two products. b. Determine the weighted-average contribution margin per unit. c. Calculate the break-even point in total number of units. d. Determine the number of units of each product Rooney must sell to break even. e. Verify the break-even point by preparing an income statement for each product as well as an income statement for the combined products. f. Determine the margin of safety based on the combined sales of the two products. Complete this question by entering your answers in the tabs below.

Problem 3-25A (Algo) Determining the break-even point and margin of safety for a company with multiple products LO 3-6 Rooney Company produces two products. Budgeted annual income statements for the two products are provided as follows. Power Lite Total Budgeted Per Budgeted Budgeted Per Budgeted Budgeted Budgeted Number Unit @ $ 700 = $168,000 e 380 =(91,200) @ 320 = Unit @ $ 570 = $ 319,200 e 300 = (168,000) @ 270 = Number Amount $ 487,200 (259,200) 228,000 (114,000) Amount Number Amount Sales 240 560 800 Variable cost 240 560 800 Contribution margin 240 76,800 (19,000) $ 57,800 151,200 (95,000) 560 800 Fixed cost Net income $ 56,200 $ 114,000 Required: a. Based on budgeted sales, determine the relative sales mix between the two products. b. Determine the weighted-average contribution margin per unit. c. Calculate the break-even point in total number of units. d. Determine the number of units of each product Rooney must sell to break even. e. Verify the break-even point by preparing an income statement for each product as well as an income statement for the combined products. f. Determine the margin of safety based on the combined sales of the two products. Complete this question by entering your answers in the tabs below.

Survey of Accounting (Accounting I)
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter14: Decentralized Operations
Section: Chapter Questions
Problem 14.1E: Budget performance reports for cost centers Partially completed budget performance reports for...
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Problem 3-25A (Algo) Determining the break-even point and margin of safety for a company with multiple products LO 3-6 Rooney Company produces two products. Budgeted annual income statements for the two products are provided as follows. Power Lite Total Budgeted Per Budgeted Budgeted Per Budgeted Budgeted Budgeted Number Unit Amount Number Unit Amount Number Amount @ $ 570 = $ 319,200 (168,000) 151,200 (95,000) $ 487,200 (259,200) 228,000 (114,000) $ 114,000 @ $ 700 = $168,000 (91,200) Sales 240 560 800 Variable cost 240 380 = 560 300 800 = Contribution margin 240 320 = @ 270 = 76,800 (19,000) $ 57,800 560 800 Fixed cost Net income $ 56,200 Required: a. Based on budgeted sales, determine the relative sales mix between the two products. b. Determine the weighted-average contribution margin per unit. c. Calculate the break-even point in total number of units. d. Determine the number of units of each product Rooney must sell to break even. e. Verify the break-even point by preparing an income statement for each product as well as an income statement for the combined products. f. Determine the margin of safety based on the combined sales of the two products. Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Required E Required F Based on budgeted sales, determine the relative sales mix between the two products. Relative percentage for Power % Relative percentage for Lite % < Required A Required B >
Transcribed Image Text:Problem 3-25A (Algo) Determining the break-even point and margin of safety for a company with multiple products LO 3-6 Rooney Company produces two products. Budgeted annual income statements for the two products are provided as follows. Power Lite Total Budgeted Per Budgeted Budgeted Per Budgeted Budgeted Budgeted Number Unit Amount Number Unit Amount Number Amount @ $ 570 = $ 319,200 (168,000) 151,200 (95,000) $ 487,200 (259,200) 228,000 (114,000) $ 114,000 @ $ 700 = $168,000 (91,200) Sales 240 560 800 Variable cost 240 380 = 560 300 800 = Contribution margin 240 320 = @ 270 = 76,800 (19,000) $ 57,800 560 800 Fixed cost Net income $ 56,200 Required: a. Based on budgeted sales, determine the relative sales mix between the two products. b. Determine the weighted-average contribution margin per unit. c. Calculate the break-even point in total number of units. d. Determine the number of units of each product Rooney must sell to break even. e. Verify the break-even point by preparing an income statement for each product as well as an income statement for the combined products. f. Determine the margin of safety based on the combined sales of the two products. Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Required E Required F Based on budgeted sales, determine the relative sales mix between the two products. Relative percentage for Power % Relative percentage for Lite % < Required A Required B >
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