Question

word Instructions Part 1: Sales Mix Instructions and Part 2: Break-Even Instructions Multiple-Product Break-even, Break Even Sales Revenue Cherry Blossom Products Inc. produces and sells yoga-training products: how-to DVDs and a basic equipment set (blocks, strap, and sm pillows). Last year, Cherry Blossom Products sold 13,500 DVDs and 4,500 equipment sets. Information on the two products is as follows DVDs Equipment Sets Price $8 $25 Variable cost per unit 15 Total fixed cost is $92,060. Suppose that in the coming year, the company plans to produce an extra-thick yoga mat for sale to health clubs. The company estimates that 9.000 mats can be sold at a price of $16 and a variable cost per unit of $10. Total fixed cost must be increased by 100.680 (making total fixed cost $122,740). Assume that anticipated sales of the other products, as well as their prices and variable costs remain the same

Answer 1

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Statementshowing Computations for prior year
Paticulars	DVD	Equipment Sets	Total
Sales	108,000.00	112,500.00	220,500.00
Less Variable Expenses	54,000.00	67,500.00	121,500.00
Contribution Margin	54,000.00	45,000.00	99,000.00
Fixed cost			92,060.00
Net operating income			6,940.00
Weighted contribution = 99000/18000			5.50
Contribution margin ratio = 99000/220,500			44.90%
Break even Sales revenue = 92060/44.90%			205,042.73
Break even sales units = 92060/5.50	12,553.64	4,184.55	16,738.18
Statementshowing Computations for current year
Paticulars	DVD	Equipment Sets	Yoga Mat	Total
Sales	108,000.00	112,500.00	144,000.00	364,500.00
Less Variable Expenses	54,000.00	67,500.00	90,000.00	211,500.00
Contribution Margin	54,000.00	45,000.00	54,000.00	153,000.00
Fixed cost				122,740.00
Net operating income				30,260.00
Weighted contribution = 153000/27				5.67
Contribution margin ratio = 153000/364500				41.98%
Break even Sales revenue = 122,740/41.98%				292,410.00
Break even sales units = 122740/5.67	10,830.00	3,610.00	7,220.00	21,660.00