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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
USING A COMPUTER SPREADSHEET TO SOLVE MULTIPLEPRODUCT BREAK-EVEN, VARYING SALES MIX
The following projected income statement for More-Power Company is repeated for your convenience. Recall that the projection is based on sales of 75,000 regular sanders and 30,000 mini-sanders.
|
 |
Regular |
 |
 |
|
 |
Sander |
Mini-Sander |
Total |
|
Sales |
$3,000,000 |
$1,800,000 |
$4,800,000 |
|
Less: Variable expenses |
1,800,000 |
900,000 |
2,700,000 |
|
Contribution margin |
$1,200,000 |
$ 900,000 |
$2,100,000 |
|
Less: Direct fixed expenses Product margin |
250,000 |
450,000 |
700,000 |
|
$ 950,000 |
$ 450,000 |
$1,400,000 |
|
|
Less: Common fixed expenses |
 |
 |
600,000 |
|
Operating income |
 |
 |
$ 800,000 |
Required:
1. Set up the given income statement on a spreadsheet (e.g., Excelâ„¢). Then, substitute the following sales mixes, and calculate operating income. Be sure to print the results for each sales mix (a through d).
|
 |
Regular Sander |
Mini-Sander |
|
a. |
75,000 |
37,500 |
|
b. |
60,000 |
60,000 |
|
c. |
30,000 |
90,000 |
|
d. |
30,000 |
60,000 |
2. Calculate the break-even units for each product for each of the preceding sales mixes.
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