Suppose that Chillmax Company now sells both pairs of shoes and fabric carryalls. The pairs of shoes are priced at $60 and have variable costs of $21 each. The carryalls are priced at $36 and have variable costs of $9 each. Total fixed cost for Chillmax as a whole equals $91,500 (includes all fixed factory overhead and fixed selling and administrative expense). Next year, Chillmax expects to sell 3,500 pairs of shoes and 875 carryalls.

Required:
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1. Form a package of shoes and carryalls based on the sales mix expected for the coming year.

Product Price – Unit
Variable
Cost = Unit
Contribution
Margin × Sales
Mix = Package
Unit
Contribution
Margin
Shoes $fill in the blank 47ad5304202b04e_1
60
$fill in the blank 47ad5304202b04e_2
21
$fill in the blank 47ad5304202b04e_3
39
fill in the blank 47ad5304202b04e_4
$fill in the blank 47ad5304202b04e_5

Carryall fill in the blank 47ad5304202b04e_6
36
fill in the blank 47ad5304202b04e_7
9
fill in the blank 47ad5304202b04e_8
27
fill in the blank 47ad5304202b04e_9
fill in the blank 47ad5304202b04e_10

Package total $fill in the blank 47ad5304202b04e_11

2. Calculate the break-even point in units for pairs of shoes and for carryalls.

Break-Even Pairs of Shoes fill in the blank 47ad5304202b04e_12
units

Break-Even Carryalls fill in the blank 47ad5304202b04e_13
units

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3. Check your answer by preparing a contribution margin income statement. Enter all amounts as positive value.

Chillmax Company
Contribution Margin Income Statement
At Break-Even Point in Units for a Multiple-Product Firm
blank Total blank blank
Sales $fill in the blank 75bec406a01cffc_1
blank blank
Total variable cost fill in the blank 75bec406a01cffc_2
blank blank
Total contribution margin $fill in the blank 75bec406a01cffc_3
blank blank
Total fixed cost fill in the blank 75bec406a01cffc_4
91,500
Operating income $fill in the blank 75bec406a01cffc_5
blank blank