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  • Group Presentation 6-32: Bilongilot, Chan, Estrella, Uy

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    emorej1995
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    The document presents an income statement and break-even analysis for Piedmont Fasteners Corporation which produces three products: Velcro, Metal, and Nylon. It shows sales, variable costs, contribution margin, fixed expenses and net operating income for each product and in total. It then calculates the break-even point in units for each product individually. Applying these individual break-even units results in total sales of $317,500, which is less than total fixed expenses of $400,000, therefore resulting in a net loss. This occurs because break-even was calculated independently for each product rather than considering total fixed expenses.

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    Management Accounting 3 Case Study for Review Reported

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    The document presents an income statement and break-even analysis for Piedmont Fasteners Corporation which produces three products: Velcro, Metal, and Nylon. It shows sales, variable costs, contribution margin, fixed expenses and net operating income for each product and in total. It then calculates the break-even point in units for each product individually. Applying these individual break-even units results in total sales of $317,500, which is less than total fixed expenses of $400,000, therefore resulting in a net loss. This occurs because break-even was calculated independently for each product rather than considering total fixed expenses.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
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    9 views6 pages

    Group Presentation 6-32: Bilongilot, Chan, Estrella, Uy

    Uploaded by

    emorej1995
    The document presents an income statement and break-even analysis for Piedmont Fasteners Corporation which produces three products: Velcro, Metal, and Nylon. It shows sales, variable costs, contribution margin, fixed expenses and net operating income for each product and in total. It then calculates the break-even point in units for each product individually. Applying these individual break-even units results in total sales of $317,500, which is less than total fixed expenses of $400,000, therefore resulting in a net loss. This occurs because break-even was calculated independently for each product rather than considering total fixed expenses.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
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    of 6

    GROUP PRESENTATION 6-32

    Bilongilot, Chan, Estrella, Uy

    32.1
    Piedmont Fasteners Corporation
    Income Statement -- Contribution

    VELCRO
    100,000 U
    Sales

    METAL
    200,000 U

    NYLON
    400,000 U $340,000 100,000 $240,000 $0.85 0.25

    TOTAL
    $805,000 365,000 $440,000 $400,000 $40,000

    $165,00 0 125,000

    $1.65 $300,000 $1.50 1.25 140,000 0.70

    Variable Costs Contribution Margin Fixed Expenses Net Operating Income

    $40,000

    $160,000

    BREAK EVEN SALES COMPUTATION

    6-32.2.a
    Break-even point in units for each product

    6-32.2.b
    Overall profit w/ application of Break-even points per unit of each product Velcro Metal Nylon Total
    Unit Sales to BE Sales Variable Expense Contribution Margin Fixed expenses Net operating income 50,000 Units $82,500 (62,500) $20,000 100,000 Units $150,000 (70,000) $80,000 100,000 Units $85,000 (25,000) $60,000 $317,500 (157,500) 160,000 (400,000) ($240,000)

    6-32.2.b
    The reason for this phenomena of having a net loss of $240,000 in the application of the break-even units per product is the total sales of $317,500. Compared with the first problems over-all computer total sales at break-even which would sum up to $732,000, it can be seen that there is a huge difference. Since each products break-even units were computed independently from each other, it has rendered a more accurate, yet confusing result boxing out the other fixed expenses costing $240,000.

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