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...


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

Extracted text: 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?*

Jun 01, 2022
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