The world’s Largest Sharp Brain Virtual Experts Marketplace Just a click Away
Levels Tought:
Elementary,Middle School,High School,College,University,PHD
| Teaching Since: | May 2017 |
| Last Sign in: | 411 Weeks Ago, 1 Day Ago |
| Questions Answered: | 66690 |
| Tutorials Posted: | 66688 |
MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
BYP6-1Â Current Designs manufactures two different types of kayaks, rotomolded kayaks and com- posite kayaks. The following information is available for each product line.
Â
|
 |
Rotomolded |
 |
Composite |
|
Sales price/unit |
$950 |
 |
$2,000 |
|
Variable costs/unit |
$570 |
 |
$1,340 |
The company’s fixed costs are $820,000. An analysis of the sales mix identifies that rotomolded kayaks make up 80% of the total units sold.
Â
Â
Â
Â
Instructions
(a)Â Determine the weighted-average unit contribution margin for Current Designs.
(b)Â Determine the break-even point in units for Current Designs and identify how many units of each type of kayak will be sold at the break-even point. (Round to the nearest whole number.)
(c)Â Â Assume that the sales mix changes, and rotomolded kayaks now make up 70% of total units sold. Calculate the total number of units that would need to be sold to earn a net income of
$2,000,000 and identify how many units of each type of kayak will be sold at this level of in- come. (Round to the nearest whole  number.)
(d)Â Assume that Current Designs will have sales of $3,000,000 with two-thirds of the sales dollars in rotomolded kayaks and one-third of the sales dollars in composite kayaks. Assuming $660,000 of fixed costs are allocated to the rotomolded kayaks and $160,000 to the composite kayaks, prepare a CVP income statement for each product line.
(e)Â Â Using the information in part (d), calculate the degree of operating leverage for each product line and interpret your findings. (Round to two decimal places.)
Hel-----------lo -----------Sir-----------/Ma-----------dam----------- Â----------- Th-----------ank----------- Yo-----------u f-----------or -----------usi-----------ng -----------our----------- we-----------bsi-----------te -----------and----------- ac-----------qui-----------sit-----------ion----------- of----------- my----------- po-----------ste-----------d s-----------olu-----------tio-----------n. -----------Ple-----------ase----------- pi-----------ng -----------me -----------on -----------cha-----------t I----------- am----------- on-----------lin-----------e o-----------r i-----------nbo-----------x m-----------e a----------- me-----------ssa-----------ge -----------I w-----------ill-----------