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Exercise 7-51

Exercise 7-51. Facts given: Standard Chrome Sales Price $ 65 $ 75 VE per unit $ 50 $ 55 CM per unit $ 15 $ 20 Total Fixed Expenses = $ 15,300 Sales Mix is 3 standard sales for every 2 chrome sales (3/5 and 2/5)

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Exercise 7-51

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  1. Exercise 7-51 Facts given: Standard Chrome Sales Price $ 65 $ 75 VE per unit $ 50$ 55 CM per unit $ 15 $ 20 Total Fixed Expenses = $ 15,300 Sales Mix is 3 standard sales for every 2 chrome sales (3/5 and 2/5) What is the BE in sales for each product?

  2. Exercise 7-51 Standard Chrome Sales Price $ 65 $ 75 VE per unit $ 50$ 55 CM per unit $ 15 $ 20 x Sales Mix x 3/5x 2/5 WACM per unit 9 + 8 = $17 BE in Units = Fixed Exp / WACM per unit BE in Units = $ 15,300/$ 17 = 900 units (total) Per Product: Standard: 900 units x 3/5 = 540 units Chrome: 900 units x 2/5 = 360 units

  3. Exercise 7-51 How many units would the company need to sell to earn $9,350? TP in Units = Fixed Exp + TP / WACM per unit TP in Units = $ 15,300 + 9,350 /$ 17 = 1,450 units (total) Per Product: Standard: 1,450 units x 3/5 = 870 units Chrome: 1,450 units x 2/5 = 580 units

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