Lindstrom Company produces two fountain pen models. Information about its products follows: Product A Product B Sales revenue $ 75,000 $ 125,000 Less: Variable costs 33,000 38,000 Contribution margin $ 42,000 $ 87,000 Total units sold 5,000 5,000Lindstrom’s fixed costs total $78,500.Required:1. Determine Lindstrom’s weighted-average unit contribution margin and weighted-average contribution margin ratio. (Round your contribution margin ratio to 1 decimal place (i.e. .123 should be entered as 12.3%)). 2. Calculate Lindstrom’s break-even point in units and in sales revenue. (Round your “Sales Revenue” answer to 2 decimal places and “Sales Units” answerto the nearest whole number.) 3. Calculate the number of units that Lindstrom must sell to earn a $150,000 profit.(Round your answer to the nearest whole number.) 4. Calculate Lindstrom’s margin of safety and margin of safety as a percentage of sales if it sells 8,000 total pens. (Round your margin of safety in units to the nearest whole number and your percentage of sales answer to 2 decimal places (i.e. .1234 should be entered as 12.34%))
Recent Comments