Vandenberg, Inc., produces and sells two products: a ceiling fan and a table fan. Vandenbergplans to sell 30,000 ceiling fans and 70,000 table fans in the coming year. Product price and costinformation includes: Ceiling Fan Table FanPrice $60 $15Unit variable cost $12 $7Direct fixed cost $23,600 $45,000Common fixed selling and administrative expenses total $85,000.Required:1. What is the sales mix estimated for next year (calculated to the lowest whole number foreach product)?2. Using the sales mix from Requirement 1, form a package of ceiling fans and table fans.How many ceiling fans and table fans are sold at break-even?3. Prepare a contribution-margin-based income statement for Vandenberg, Inc., based on theunit sales calculated in Requirement 2.4. What if Vandenberg, Inc., wanted to earn operating income equal to $14,400? Calculate thenumber of ceiling fans and table fans that must be sold to earn this level of operatingincome. (Hint: Remember to form a package of ceiling fans and table fans based on thesales mix and to first calculate the number of packages to earn an operating income of$14,400.)

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 6CE

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Vandenberg, Inc., produces and sells two products: a ceiling fan and a table fan. Vandenberg
plans to sell 30,000 ceiling fans and 70,000 table fans in the coming year. Product price and cost
information includes:

Ceiling Fan Table Fan
Price $60 $15
Unit variable cost $12 $7
Direct fixed cost $23,600 $45,000
Common fixed selling and administrative expenses total $85,000.
Required:
1. What is the sales mix estimated for next year (calculated to the lowest whole number for
each product)?
2. Using the sales mix from Requirement 1, form a package of ceiling fans and table fans.
How many ceiling fans and table fans are sold at break-even?
3. Prepare a contribution-margin-based income statement for Vandenberg, Inc., based on the
unit sales calculated in Requirement 2.
4. What if Vandenberg, Inc., wanted to earn operating income equal to $14,400? Calculate the
number of ceiling fans and table fans that must be sold to earn this level of operating
income. (Hint: Remember to form a package of ceiling fans and table fans based on the
sales mix and to first calculate the number of packages to earn an operating income of
$14,400.)

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