# Mendel Paper Company

602 Words3 Pages
1 Mendel Paper Company 2 Mendel Paper Company The Medel Paper Company is a successful paper manufacturing company with a sales mix of four different paper product lines consisting of computer paper, napkins, place mats and poster board. The plant superintendent, Marlene Herbert, is pleased with sales but concerned with trends in the industry effecting paper manufacturing. While napkins and paper mats are increasing because of increasing restaurant sales, the cost of specialized printing of place mats may no longer make these feasible to produce. Additionally, although there are concerns of the inevitable “paperless” office, but Mendel Paper has noticed that instead of losing paper sales they are actually increasing their sales of computer paper. 1. From all original estimates given, prepare estimated contribution margins by product line for the next fiscal quarter. Also, show the contributions margins per unit. 2. Prepare contributions margins in part (1) with all revisions included. 3. For the original estimates, compute each of the following: (a) Break-even point for the given sales mix. (b) Margin of safety for the estimated sales volume. 3 Part A and B (Original Estimates) | Comp Paper | Napkins | Place mats | Poster Board | 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 overheads | 9 | 6 | 12 | 8 | | Variable overheads per unit | 1.5 | 0.6 | 2.4 | 2 | | | | | | | | Sales (Volume*Selling Price) | 420000 | 840000 | 540000 | 680000 | 2480000 | Material cost | 180000 | 540000 | 162000