Park Ave. Designs manufactures and sells mens dress ties. They have two styles, polyester ties (Model 465) and cotton ties (Model 565). In 2024, the company disclosed the following information to Turi Consulting: Model 465 Model 565 Units Sold 25,000 15,000
Sales Price $ 12.00 $ 15.00 Variable Cost per unit $ 6.00 $ 10.00 Total Fixed Costs $95,000
In talks with the Turi Consulting Company, Park Ave. Designs plans to produce a custom tie (Model 656) with personalized monograms on them. Park Ave. Designs believe that they can sell the following: Model 656
Units Sold $10,000
Sales Price $ $18.00
Variable Cost per unit $ $12.00 Total Fixed Costs will increase by 16,500
Park Ave. Designs assumes that the sames of the other two products will remain constant.
1. Determine the sales mix for the Model 465, Model 565 and Model 656. 2. What is the break-even (dollars) for each Model?
3. Prepare a contribution approach income statement for Park Ave. Designs for 2025. Assume that sales for Model 465 and Model 565 remain constant and they add the customized tie (Model 656).
4. What is the Margin of Safety for 2025 in sales dollars?