Gernon Company produces scientific and business calculators. For the coming year, Gernon expects to sell 20,000 scientific calculators and 100,000 business calculators. A segmented income statement for the two products follows: (continued) Segment margin $140,000 $ 140,000 $ 280,000 Less: Common fixed costs 145,000 Operating income $ 135,000 Required 1. Compute the number of scientific calculators and the number of business calcu- lators that must be sold to break even. 2. Using information from only the “Total” column of the income statement, com- pute the sales revenue that must be generated for the company to break even.
Gernon Company produces scientific and business calculators. For the coming year, Gernon expects to sell 20,000 scientific calculators and 100,000 business calculators. A segmented income statement for the two products follows: (continued) Segment margin $140,000 $ 140,000 $ 280,000 Less: Common fixed costs 145,000 Operating income $ 135,000 Required 1. Compute the number of scientific calculators and the number of business calcu- lators that must be sold to break even. 2. Using information from only the “Total” column of the income statement, com- pute the sales revenue that must be generated for the company to break even.
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 32P: More-Power Company has projected sales of 75,000 regular sanders and 30,000 mini-sanders for next...
Related questions
Question
Gernon Company produces scientific and business calculators. For the coming year, Gernon expects to sell 20,000 scientific calculators and 100,000 business calculators. A segmented income statement for the two products follows:
(continued)
|
Segment margin |
$140,000 |
$ 140,000 |
$ 280,000 |
| Less: Common fixed costs |
|
| 145,000 |
| Operating income |
|
| $ 135,000 |
Required
1. Compute the number of scientific calculators and the number of business calcu- lators that must be sold to break even.
2. Using information from only the “Total” column of the income statement, com- pute the sales revenue that must be generated for the company to break even.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps with 4 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning