Piedmont Fasteners Corporation makes three different clothing fasteners in its manufacturing facility in North Carolina. All three products are sold in highly competitive markets, so the company is unable to raise prices without losing an unacceptable number of customers. Data from the most recent period concerning these products appear below: Velcro Metal Nylon 203,600 1.50 $ 0.70 $ Annual sales volume 101,800 407,200 Unit selling price Variable expense per unit Contribution margin per unit 1.65 $ 1.25 $ 0.40 $ 0.85 0.25 0.80 $ 0.60 Total fixed expenses are $407,200 per period. Of the total fixed expenses, $20,000 could be avoided if the Velcro product is dropped, $80,000 if the Metal product is dropped, and $60,000 if the Nylon product is dropped. The remaining fixed expenses of $247,200 consist of common fixed expenses such as administrative salaries and rent on the factory building that could be avoided only by going out of business entirely. The company's managers would like to compute the break-even point in dollar sales for the company as a whole, and the break-even point in unit sales for each product. They are considering two methods for computing each product's break-even point unit sales: Method #1. Include each product's traceable fixed costs and an allocated share of the common fixed costs in the numerator of each break-even calculation. The common fixed costs would be allocated to the three products using sales dollars as the allocation base. Method #2. Only include each product's traceable fixed costs in the numerator of each break-even calculation. Required: 1. Using data from the most recent period, prepare a contribution format segmented income statement. 2. What is the company's over-all break-even point in dollar sales? 3a. Calculate the break-even point in unit sales for each product using method 1. 3b. If the company sells exactly the break-even quantity of each product, what will be the overall profit for the company using method 1? 4a. Calculate the break-even point in unit sales for each product using method 2. 4b. If the company sells exactly the break-even quantity of each product, what will be the overall profit for the company using method 2? 5. Which method should the company use to calculate each product's break-even point in unit sales?

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Piedmont Fasteners Corporation makes three different clothing fasteners in its manufacturing facility in North Carolina. All three
products are sold in highly competitive markets, so the company is unable to raise prices without losing an unacceptable number of
customers. Data from the most recent period concerning these products appear below:
Velcro
Nylon
407,200
Metal
Annual sales volume
101,800
203,600
Unit selling price
Variable expense per unit
Contribution margin per unit
$
1.65 $
1.50 $
0.85
1.25 $
0.70 $
0.25
0.40 $
0.80 $
0.60
Total fixed expenses are $407,200 per period. Of the total fixed expenses, $20,000 could be avoided if the Velcro product is dropped,
$80,000 if the Metal product is dropped, and $60,000 if the Nylon product is dropped. The remaining fixed expenses of $247,200
consist of common fixed expenses such as administrative salaries and rent on the factory building that could be avoided only by going
out of business entirely.
The company's managers would like to compute the break-even point in dollar sales for the company as a whole, and the break-even
point in unit sales for each product. They are considering two methods for computing each product's break-even point unit sales:
Method #1: Include each product's traceable fixed costs and an allocated share of the common fixed costs in the numerator of each
break-even calculation. The common fixed costs would be allocated to the three products using sales dollars as the allocation base.
Method #2: Only include each product's traceable fixed costs in the numerator of each break-even calculation.
Required:
1. Using data from the most recent period, prepare a contribution format segmented income statement.
2. What is the company's over-all break-even point in dollar sales?
3a. Calculate the break-even point in unit sales for each product using method 1.
3b. If the company sells exactly the break-even quantity of each product, what will be the overall profit for the company using method
1?
4a. Calculate the break-even point in unit sales for each product using method 2.
4b. If the company sells exactly the break-even quantity of each product, what will be the overall profit for the company using method
2?
5. Which method should the company use to calculate each product's break-even point in unit sales?
Complete this question by entering your answers in the tabs below.
Req 1
Reg 2
Reg 3a and 3b Reg 4a and 4b
Req 5
Using data from the most recent period, prepare a contribution format segmented income statement.
Piedmont Fasteners Corporation
Contribution Format Income Statement
Velcro
Metal
Nylon
Total
Sales
$
167,970
305,400 $
346,120 $
819,490
Variable expenses
127,250
142,520
101,800
371,570
Contribution margin
40,720
162,880
244.320
447,920
Traceable fixed expenses
Segment margin
40,720
$
162.880
$
244,320
447,920
Common fixed expenses
Net operating income
2$
40,270
< Req 1
Req 2 >
Transcribed Image Text:Piedmont Fasteners Corporation makes three different clothing fasteners in its manufacturing facility in North Carolina. All three products are sold in highly competitive markets, so the company is unable to raise prices without losing an unacceptable number of customers. Data from the most recent period concerning these products appear below: Velcro Nylon 407,200 Metal Annual sales volume 101,800 203,600 Unit selling price Variable expense per unit Contribution margin per unit $ 1.65 $ 1.50 $ 0.85 1.25 $ 0.70 $ 0.25 0.40 $ 0.80 $ 0.60 Total fixed expenses are $407,200 per period. Of the total fixed expenses, $20,000 could be avoided if the Velcro product is dropped, $80,000 if the Metal product is dropped, and $60,000 if the Nylon product is dropped. The remaining fixed expenses of $247,200 consist of common fixed expenses such as administrative salaries and rent on the factory building that could be avoided only by going out of business entirely. The company's managers would like to compute the break-even point in dollar sales for the company as a whole, and the break-even point in unit sales for each product. They are considering two methods for computing each product's break-even point unit sales: Method #1: Include each product's traceable fixed costs and an allocated share of the common fixed costs in the numerator of each break-even calculation. The common fixed costs would be allocated to the three products using sales dollars as the allocation base. Method #2: Only include each product's traceable fixed costs in the numerator of each break-even calculation. Required: 1. Using data from the most recent period, prepare a contribution format segmented income statement. 2. What is the company's over-all break-even point in dollar sales? 3a. Calculate the break-even point in unit sales for each product using method 1. 3b. If the company sells exactly the break-even quantity of each product, what will be the overall profit for the company using method 1? 4a. Calculate the break-even point in unit sales for each product using method 2. 4b. If the company sells exactly the break-even quantity of each product, what will be the overall profit for the company using method 2? 5. Which method should the company use to calculate each product's break-even point in unit sales? Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Reg 3a and 3b Reg 4a and 4b Req 5 Using data from the most recent period, prepare a contribution format segmented income statement. Piedmont Fasteners Corporation Contribution Format Income Statement Velcro Metal Nylon Total Sales $ 167,970 305,400 $ 346,120 $ 819,490 Variable expenses 127,250 142,520 101,800 371,570 Contribution margin 40,720 162,880 244.320 447,920 Traceable fixed expenses Segment margin 40,720 $ 162.880 $ 244,320 447,920 Common fixed expenses Net operating income 2$ 40,270 < Req 1 Req 2 >
Piedmont Fasteners Corporation makes three different clothing fasteners in its manufacturing facility in North Carolina. All three
products are sold in highly competitive markets, so the company is unable to raise prices without losing an unacceptable number of
customers. Data from the most recent period concerning these products appear below:
Velcro
Metal
Nylon
Annual sales volume
101,800
203,600
407,200
Unit selling price
Variable expense per unit
Contribution margin per unit
1.65 $
1.50 $
0.85
1.25
24
0.70 $
0.25
0.40 $
0.80 $
0.60
Total fixed expenses are $407,200 per period. Of the total fixed expenses, $20,000 could be avoided if the Velcro product is dropped,
$80,000 if the Metal product is dropped, and $60,000 if the Nylon product is dropped. The remaining fixed expenses of $247,200
consist of common fixed expenses such as administrative salaries and rent on the factory building that could be avoided only by going
out of business entirely.
The company's managers would like to compute the break-even point in dollar sales for the company as a whole, and the break-even
point in unit sales for each product. They are considering two methods for computing each product's break-even point unit sales:
Method #1. Include each product's traceable fixed costs and an allocated share of the common fixed costs in the numerator of each
break-even calculation. The common fixed costs would be allocated to the three products using sales dollars as the allocation base.
Method #2: Only include each product's traceable fixed costs in the numerator of each break-even calculation.
Required:
1. Using data
2. What is the company's over-all break-even point in dollar sales?
3a. Calculate the break-even point in unit sales for each product using method 1.
3b. If the company sells exactly the break-even quantity of each product, what will be the overall profit for the company using method
1?
the most recent period, prepare a cor
tion form
segmented
nent
4a. Calculate the break-even point in unit sales for each product using method 2.
4b. If the company sells exactly the break-even quantity of each product, what will be the overall profit for the company using method
2?
5. Which method should the company use to calculate each product's break-even point in unit sales?
Complete this question by entering your answers in the tabs below.
Req 1
Req 2
Reg 3a and 3b Reg 4a and 4b
Req 5
What is the company's over-all break-even point in dollar sales? (Round your intermediate calculations to 4 decimal places
and final answer to the nearest whole number.)
Overall break-even point
< Req 1
Req 3a and 3b
>
Transcribed Image Text:Piedmont Fasteners Corporation makes three different clothing fasteners in its manufacturing facility in North Carolina. All three products are sold in highly competitive markets, so the company is unable to raise prices without losing an unacceptable number of customers. Data from the most recent period concerning these products appear below: Velcro Metal Nylon Annual sales volume 101,800 203,600 407,200 Unit selling price Variable expense per unit Contribution margin per unit 1.65 $ 1.50 $ 0.85 1.25 24 0.70 $ 0.25 0.40 $ 0.80 $ 0.60 Total fixed expenses are $407,200 per period. Of the total fixed expenses, $20,000 could be avoided if the Velcro product is dropped, $80,000 if the Metal product is dropped, and $60,000 if the Nylon product is dropped. The remaining fixed expenses of $247,200 consist of common fixed expenses such as administrative salaries and rent on the factory building that could be avoided only by going out of business entirely. The company's managers would like to compute the break-even point in dollar sales for the company as a whole, and the break-even point in unit sales for each product. They are considering two methods for computing each product's break-even point unit sales: Method #1. Include each product's traceable fixed costs and an allocated share of the common fixed costs in the numerator of each break-even calculation. The common fixed costs would be allocated to the three products using sales dollars as the allocation base. Method #2: Only include each product's traceable fixed costs in the numerator of each break-even calculation. Required: 1. Using data 2. What is the company's over-all break-even point in dollar sales? 3a. Calculate the break-even point in unit sales for each product using method 1. 3b. If the company sells exactly the break-even quantity of each product, what will be the overall profit for the company using method 1? the most recent period, prepare a cor tion form segmented nent 4a. Calculate the break-even point in unit sales for each product using method 2. 4b. If the company sells exactly the break-even quantity of each product, what will be the overall profit for the company using method 2? 5. Which method should the company use to calculate each product's break-even point in unit sales? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Reg 3a and 3b Reg 4a and 4b Req 5 What is the company's over-all break-even point in dollar sales? (Round your intermediate calculations to 4 decimal places and final answer to the nearest whole number.) Overall break-even point < Req 1 Req 3a and 3b >
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