RADEN PAPER COMPANY

1
Computer Paper Napkins Place Mats Poster Boards Total
volume 30000 120000 45000 80000
selling price 14 7 12 8.5
material cost 6 4.5 3.6 2.5
units per hour 6 10 5 4
variable Overhead 13 6 12 8
variable Overhead per unit 2.2 0.6 2.4 2

total sales 420000 840000 540000 680000 2480000

material cost 180000 540000 162000 200000
variable overhead 65000 72000 108000 160000

Computer Paper Napkins Place Mats Poster Boards Total

Contribution Margin/breakeven 175000 228000 270000 320000 993000
Contribution margin in percent 18% 23% 27% 32%
CM per unit 5.8 1.9 6 4

sales mix 17% 34% 22% 27% 100%

2
Computer Paper Napkins Place Mats Poster Boards Total
volume 35000 120000 45000 80000
selling price 14 7 12 8.5
material cost 7.2 4.5 4 2.4
units per hour 6 10 5 4
variable Overhead 13 6 12 8
variable Overhead per unit 2.2 0.6 2.4 2.0

total sales 490000 840000 540000 680000 2550000

material cost 252000 540000 180000 192000
variable overhead 75833 72000 108000 160000

Computer Paper Napkins Place Mats Poster Boards Total

Contribution Margin/breakeven 162166.7 228000 252000 328000 970166.7
Contribution margin in percent 17% 24% 26% 34%
CM per unit 4.6 1.9 5.6 4.1

sales mix 19% 33% 21% 27% 100%

3. original values for all

a.
Break Even 993000
b 1487000
Margin of Safety 60%

4. Estimated Values for all

a
Break Even 970167
b 1579833.3333333
Margin of Safety 62%
original
Rendel Paper Company
Income Statement
for the year ended
Computer Paper Napkins
Sales 420000 840000
Less: Variable Cost
Variable Overhead 65000 72000
Material Cost 180000 540000
Total Variable Cost 245000 612000
Contribution Margin 175000 228000
(CMR) 42% 27%
Less: Fixed Cost
margin before Selling & Administrative Expense
contribution margin before S&A Expense / sales
less: Selling & Administrative Expense
Net income

BES 1238751.2588117
sales mix 18% 23%
Breakeven in peso
breakeven in units
selling price per unit

revised values
Rendel Paper Company
Income Statement
for the year ended
Computer Paper Napkins
Sales 490000 840000
Less: Variable Cost
Variable Overhead 75833 72000
Material Cost 252000 540000
Total Variable Cost 327833 612000
Contribution Margin 162167 228000
(CMR) 33% 27%
Less: Fixed Cost
margin before Selling & Administrative Expense
contribution margin before S&A Expense / sales
less: Selling & Administrative Expense
Net income

BES 1303693.5234496
sales mix 17% 24%
Breakeven in peso
breakeven in units
selling price per unit
mpany
ent
ded
Place Mats Poster Boards total
540000 680000 2480000

108000 160000 405000

162000 200000 1082000
270000 360000 1487000
270000 320000 993000
50% 47% 40.0403%
400,000
593,000
24%
96,000
497,000

27% 32% 100%

mpany
ent
ded
Place Mats Poster Boards total
540000 680000 2550000

108000 160000 415833.333

180000 192000 1164000
288000 352000 1579833.33
252000 328000 970166.667
47% 48% 38.0458%
400,000
570,167
22%
96,000
474,167

26% 34% 100%