Sutton produces four products. Relevant data is shown below for period 2. Product
M、Product
A、Product R Product P C/S ratio 5% 10% 15% 20% Maximum sales value $200,000 $120,000 $200,000 $180,000 Minimum sales value $50,000 $50,000 $20,000 $10,000 The fixed costs for period 2 are budgeted at $60,000. Required Fill in the blank in the sentence below. The lowest breakeven sales value, subject to meeting the minimum sales value constraints, is $........…..
M、Product
A、Product R Product P C/S ratio 5% 10% 15% 20% Maximum sales value $200,000 $120,000 $200,000 $180,000 Minimum sales value $50,000 $50,000 $20,000 $10,000 The fixed costs for period 2 are budgeted at $60,000. Required Fill in the blank in the sentence below. The lowest breakeven sales value, subject to meeting the minimum sales value constraints, is $........…..
【参考答案及解析】
The correct answer is $390,000. Breakeven point occurs when contribution = fixed costs. ∴ Minimum breakeven point occurs when contribution is $60,000. Contribution achieved from minimum sales value Product P has the highest C/S ratio and so should be produced first (as it earns more contribution per $ of revenue than the others). Contribution from sales of P between minimum and maximum points = $170,000 × 20% = $34,000 ∴ Required contribution from Product R (which has the next highest C/S ratio) = $(60,000 – 12,500 – 34,000) = $13,500 Revenue from Product R of $13,500/0.15 = $90,000 will produce $13,500 of contribution. ∴ Lowest breakeven sales = $130,000 (minimum sales) + $170,000 (from P) + $90,000 (from R) = $390,000
The correct answer is $390,000. Breakeven point occurs when contribution = fixed costs. ∴ Minimum breakeven point occurs when contribution is $60,000. Contribution achieved from minimum sales value Product P has the highest C/S ratio and so should be produced first (as it earns more contribution per $ of revenue than the others). Contribution from sales of P between minimum and maximum points = $170,000 × 20% = $34,000 ∴ Required contribution from Product R (which has the next highest C/S ratio) = $(60,000 – 12,500 – 34,000) = $13,500 Revenue from Product R of $13,500/0.15 = $90,000 will produce $13,500 of contribution. ∴ Lowest breakeven sales = $130,000 (minimum sales) + $170,000 (from P) + $90,000 (from R) = $390,000