(a)
Concept introduction:
Breakeven Point:
The level of sales where the company is neither on profit nor loss is termed as breakeven point. In other words, that level of sales at which the fixed cost of the business is recovered.
The breakeven point if the product mix is
Answer to Problem 17E
The breakeven point in units is
Explanation of Solution
Contribution Margin Income Statement
Particulars | Standard | Deluxe |
Rental Price |
||
Variable Cost per Canoe |
||
Contribution Margin |
As the product mix is
So, the weighted contribution margin is calculated as:
The break-even point in units is calculated as:
(b)
Concept introduction:
Breakeven Point:
The level of sales where the company is neither on profit nor loss is termed as breakeven point. In other words, that level of sales at which the fixed cost of the business is recovered.
The breakeven point if the sales of both model increases by
Answer to Problem 17E
The breakeven point in units is
Explanation of Solution
Contribution Margin Income Statement
Particulars | Standard | Deluxe |
Rental Price |
||
Variable Cost per Canoe |
||
Contribution Margin |
As the product mix is
So, the weighted contribution margin is calculated as:
The break-even point in units is calculated as:
(c)
Concept introduction:
Breakeven Point:
The level of sales where the company is neither on profit nor loss is termed as breakeven point. In other words, that level of sales at which the fixed cost of the business is recovered.
The breakeven point if the fixed cost is increased by
Answer to Problem 17E
The breakeven point in units is
Explanation of Solution
Contribution Margin Income Statement
Particulars | Standard | Deluxe |
Rental Price |
||
Variable Cost per Canoe |
||
Contribution Margin |
As the product mix is
So, the weighted contribution margin is calculated as:
The break-even point in units is calculated as:
(d)
Concept introduction:
Breakeven Point:
The level of sales where the company is neither on profit nor loss is termed as breakeven point. In other words, that level of sales at which the fixed cost of the business is recovered.
The breakeven point if the variable cost increases by
Answer to Problem 17E
The breakeven point in units is
Explanation of Solution
Contribution Margin Income Statement
Particulars | Standard | Deluxe |
Rental Price |
||
Variable Cost per Canoe |
||
Contribution Margin |
As the product mix is
So, the weighted contribution margin is calculated as:
The break-even point in units is calculated as:
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