Toy Products, Inc., produces three different models with the following annual data (this is the base case):.

Labels	Airplane	Train	Ship	Total
Selling price per unit	$20	$14	$24
Variable cost per unit	$5	$7	$8
Expected unit sales	30,000	50,000	20,000	100,000
Sales mix	30 %	50 %	20 %	100 %
Fixed costs				$650,000

Assume the sales mix remains the same at all levels of sales except for requirements iand j.

For this assignment, complete the following:

Round to the nearest unit of product, hundredth of a percent, and nearest cent where appropriate. (An example for unit calculations is 3,231.151 = 3,231; an example for percentage calculations is 0.434532 = 0.4345 = 43.45 percent; an example for dollar calculations is $378.9787 = $378.98.)

1. Calculate the weighted average contribution margin per unit.
2. How many units in total must be sold to break even? How many units of each product must be sold to break even?
3. How many units in total must be sold to earn an annual profit of $500,000? How many units of each product must be sold to earn an annual profit of $500,000?
4. Using the base case information, prepare a contribution margin income statement for the year similar to the one in Table 6.1.
5. Calculate the weighted average contribution margin ratio.
6. Find the break-even point in sales dollars.
7. What amount of sales dollars is required to earn an annual profit of $400,000?
8. Go back to the base case contribution margin income statement prepared in requirement F. What would the operating profit be if the Airplane sales price (1) increases 10 percent, or (2) decreases 10 percent? (Assume total sales remains at 100,000 units.)
9. Go back to the base case contribution margin income statement prepared in requirement F. If the sales mix shifts more toward the Train product than to the other two products, would the break-even point in units increase or decrease? (Detailed calculations are not necessary.) Explain.
10. Assume the company has a limited number of labor hours available in production, and management would like to make efficient use of these labor hours. The Airplane product requires 4 labor hours per unit, the Train product requires 3 labor hours per unit, and the Ship product requires 5 hours per unit. The company sells everything it produces. Based on this information, calculate the contribution margin per labor hour for each model (round to the nearest cent), and determine the top two models the company would prefer to sell to maximize overall company profit.

56. CVP and Sensitivity Analysis, Resource Constraint (Multiple Products) (continued) f. Contribution margin income statement: 56. CVP and Sensitivity Analysis, Resource Constraint (Multiple Products) (continued) j. (1) Airplane sales price increases 10% Start by calculating the new sales price for the Airplane product: Then, prepare a new contribution income statement reflecting the change: (2) Airplane sales price decreases 10% Start by calculating the new sales price for the Plane product: a. Start by calculating the contribution margin per unit for each product: Airplane contribution margin per unit = Train contribution margin per unit = Ship contribution margin per unit = Then, calculate the weighted average contribution margin per unit: Weightedaveragecontributionmarginperunit== b. The break-even point in units is calculated as: Break-evenpointinunitsAirplaneTrain=units(rounded)+=units(=+units(=units c. Break-even point in units (rounded) for each product is: Airplane Train Ship Total units (= units (= units (= units per unit per unit per unit d. The target profit point in units is calculated as: e. The target profit point in units (rounded) for each product is: Airplane Train Ship Subtotal Rounding difference Total units (= units (= units (= units