Hightech Company recently developed the technology necessary to produce a low,medium and high end computer memory chip for heart monitoring healthcare equipment.Budgeted fixed costs for the manufacture of all three products total $4,250,000.The budgeted sales by product and in total for the coming year are as follows:

Question

Quizplus · Accepted Answer

Actual sales for the year were not as planned;the following lists sales by product: 11ea6e70_bcc8_a5aa_8f54_61c798bfa517_TB1699_00 
Required:
(1)Prepare a contribution income statement for the year based on actual sales data.
(2)Compare the breakeven sales dollars for the year based on both budgeted and actual sales,assuming that the sales mix remains constant in sales dollars.
(3)The company president knows that total actual sales were $8,250,000 for the year,the same as budgeted.Because he had seen the budgeted income statement,she as expecting a nice profit from producing the memory chips.Explain to him what happened.
Please see Feedback for answers.
 Feedback: (1)Contribution analysis based on actual sales(000s) 11ea6e70_bcc8_ccbb_8f54_d5bea9e9bdac_TB1699_00 (2)Breakeven sales dollars based on actual sales mix 11ea6e70_bcc8_f3cc_8f54_8134bc1c4ecb_TB1699_00 Breakeven based on budgeted sales 11ea6e70_bcc8_f3cd_8f54_41db805fd99f_TB1699_00 Breakeven: 11ea6e70_bcc9_1ade_8f54_4b75ca4b0d90_TB1699_00 (3)Although total sales dollars remained constant ($8,250,000),the breakeven point changed because the sales mix changed.Sales shifted from products with a higher contribution margin (standard and high)to a product with a lower contribution margin (Economy).More sales were necessary to cover the same amount of fixed costs.Therefore,the breakeven point increased from $7,316,119 to $8,927,435.Also,since the actual sales level fell below $8,927,435,there was an actual net loss of $322,500.

Hightech Company Recently Developed the Technology Necessary to Produce a Low,medium