Question
In: Accounting
Pin Cushion Company produces two models of sewing basket. Information about Pin Cushion’s products is given...
Pin Cushion Company produces two models of sewing basket. Information about Pin Cushion’s products is given below:
| Product A | Product B | ||||
| Sales revenue | $ | 39,000 | $ | 54,000 | |
| Less: Variable costs | 15,800 | 24,200 | |||
| Contribution margin | $ | 23,200 | $ | 29,800 | |
| Total units sold | 1,000 | 2,040 | |||
Pin Cushion’s fixed costs total $38,500.
Required:
1. Determine Pin Cushion’s weighted-average unit contribution margin and weighted-average contribution margin ratio.
|
2. Calculate Pin Cushion’s break-even units and break-even sales revenue.
|
3. Calculate the number of units of each product that must be sold to break even.
|
||||||||||
4. Calculate the total sales necessary for Pin Cushion to earn a profit of $65,400.
|
5. Calculate the sales revenue generated from each product line if Pin Cushion earns its target profit of $65,400.
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6. Using the original information, calculate Pin Cushion’s degree of operating leverage.
|
Solutions
Expert Solution
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ekkarill92 answered 2 years agoRelated Solutions
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