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4-5 Multiple-Product Cost-Volume- Profit Analysis (CMA, adapted) x Electronics manufactures two prosucts, tape recorders and electronic calcul veils them nationally to-wholesalers and retailers. The Hewtex management is Vy eT ath the company’s performance for the current fiscal year. Projected sales 8, suggest that 120,000 tape recorders and 190,000 electronic year. The proected earnings statement, which follows, shows ‘earnings gol of 9% of sales after taxes. Assuming that the sales mix in the planning documents is achieved, how Sify tape Assuming “electron calculator units would Hewtex Electronics bave to sel in.19°8 to breakeven? ' HEWTEX ELECTRONICS Projected Earnings Statement For the Year Ended December 31,.1998 120,000 unrrs 190,000 unrrs é ‘Taps RECORDERS ELECTRONIC CALCULATORS TorAL Total Amount Total Amoint (000 (000 omitted) Per Unit (000 omisted) Per Unit omitted) Sales $1,800 $15.00 ja $28.00, $6,280 Flexible costs 53° c Materials 480 4.00 40 6.00 1,620 Laber 360 3.060 10 9.00 2 Other 120. 70 3.00 Commined costs 280 1.400 737 1,880, “Total costs 1,240 10.33 4830 2537 6,060 Gross matin” 360 467 500 2.63 1,060 Facilty-rastainiig costs 2,000 Net iieome before income taxes (940) (2). ‘What volume of sales is required if Hewiex Blectrotics is 0.9% of sales after taxcs? Hewtex Electronics faces a tax rate of 42%, (G) » Hewtéx Electronics now allocates committed costs based on flexible labor costs. sindy has defermiined that committed costs arc as follows: (1) supervisory costs for tape ecorder production —$500,000; G) supervisory salaries for electronic calculator. pro- action $600,000; (3) the Balance of the cominitted costs are proportional tothe num- ter of batches-of production. Hewtck Electronics. chedulés tape recorders for produc tion in batches of 1000, atid clettronic calculators are’ made in batches of 10,000. Finally $300,000 of whac was originally Classified as faclity-sustaining cost was ac ally attributable to tape recorders, and $400,000 wes attributable to the eleetronic calcu Jnior lie, Recast the original nancial statements to.correct the costing erfors due to smisclassification., 8 eam a profit in 1999 equal

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