PA6-6 (Algo) Multiproduct CVP, Analyzing Break-Even Point, Target Profit, Degree of Operating Leverage (LO 6-5,...
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PA6-6 (Algo) Multiproduct CVP, Analyzing Break-Even Point, Target Profit, Degree of Operating Leverage (LO 6-5, 6-6) Pin Cushion Company produces two models of sewing basket. Information about Pin Cushion's products is given below: Sales revenue Less: Variable costs Contribution margin Total units sold Product A $33,000 13,400 $19,600 880 Product B $48,000 21,800 $26,200 1,920 Pin Cushion's fixed costs total $36,700. 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 $64,200. 5. Calculate the sales revenue generated from each product line if Pin Cushion earns its target profit of $64,200. 6. Using the original information, calculate Pin Cushion's degree of operating leverage
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