More-power company has projected sales of 75,000 regular sanders and 30,000 mini-sanders for the next year.The projected income statement is as follows:
Regular sanders mini-sanders Total
Sales 3,000,000 1,800,000 4,800,000
Less:variable 1,800,000 900,000 2,700,000
Contribution margin 1,200,000 900,000 2,100,000
Less:direct fixed 250,000 450,000 700,000
Product margin 950,000 450,000 1,400,000
Less:common fixed 600,000
operating income 800,000
1.set up the given income statement on a spreadsheet.Then,substitute the following sales mixes, and calculate operating income.
Regular sanders mini-sander
2.Calculate the break-even units for each product for each of the preceding sales mixes.
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