International Printer Machines (IPM) builds three computer printer models: Alpha, Beta, and Gamma. Information for these three products is as follows: Alpha Beta Gamma Total Selling price per unit $250 $400 $1 500 Variable cost per unit $80 $200 $800 Expected unit sales (annual) 12,000 6,000 2,000 20,000 Sales mix 50 percent 40 percent 10 percent 100 percent Total annual fixed costs are $5,000,000. Assume the sales mix remains the same at all levels of sales. Required: a) Calculate the weighted average unit contribution margin, assuming a constant sales mix. b) How many units of each printer must be sold to break even? c) ) Explain what is margin of safety (-. ii) Calculate in sales units the margin of safety for IPM, assuming projected sales are 25,000 units?"

International Printer Machines (IPM) builds three computer printer models: Alpha, Beta, and Gamma. Information for these three products is as follows: Alpha Beta Gamma Total Selling price per unit $250 $400 $1 500 Variable cost per unit $80 $200 $800 Expected unit sales (annual) 12,000 6,000 2,000 20,000 Sales mix 50 percent 40 percent 10 percent 100 percent Total annual fixed costs are $5,000,000. Assume the sales mix remains the same at all levels of sales. Required: a) Calculate the weighted average unit contribution margin, assuming a constant sales mix. b) How many units of each printer must be sold to break even? c) ) Explain what is margin of safety (-. ii) Calculate in sales units the margin of safety for IPM, assuming projected sales are 25,000 units?"

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Description: International Printer Machines (IPM) builds three computer printer models: Alpha, Beta, andGamma. Information for these three products is as follows:AlphaBetaGammaTotalSelling price per unit$250$400$1 500Variable cost per unit$80$200$800Expected uni

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.

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Question

International Printer Machines (IPM) builds three computer printer models: Alpha, Beta, and
Gamma. Information for these three products is as follows:
Alpha
Beta
Gamma
Total
Selling price per unit
$250
$400
$1 500
Variable cost per unit
$80
$200
$800
Expected unit sales (annual) 12,000
6,000
2,000
20,000
Sales mix
50 percent 40 percent 10 percent 100 percent
Total annual fixed costs are $5,000,000. Assume the sales mix remains the same at all levels
of sales.
Required:
a) Calculate the weighted average unit contribution margin, assuming a constant sales mix.
b) How many units of each printer must be sold to break even?
c) i) Explain what is margin of safety -..
ii) Calculate in sales units the margin of safety for IPM, assuming projected sales are
25,000 units?*

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