Question

11 Our company makes and sells three products: A, B, and C. Selected GAAP income statement information is below: 20,000 $300,
The correct answer is E but I don't know how to get to that number.
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Answer #1

Answer E. $1062054

Calculated as below

Calculation of Contribution
A B C
a Gross margin $          11,100 $          31,200 $            41,900
b Fixed manufacturing cost $          40,000 $        198,000 $            77,100
c Fixed non manufacturing cost $          68,900 $          70,800 $            21,000
d= a+b+c Contribution $        120,000 $        300,000 $          140,000
e Sales $        300,000 $        500,000 $          450,000
f = d*100/e Contribution margin 40% 60% 31.11%
Product Contribution X Sales = Total Weighted Contribution
A 40 x $        300,000 = $    12,000,000
B 60 x $        500,000 = $    30,000,000
C 31.11 x $        450,000 = $    13,999,500
Total $    1,250,000 = $    55,999,500
Weighted Contribution = Total Weighted Contribution = $ 55,999,500
Total Sales $    1,250,000
Weighted Contribution = 44.80 %
A B C
Fixed manufacturing cost $          40,000 $        198,000 $          77,100
Fixed non manufacturing cost $          68,900 $          70,800 $          21,000
$        108,900 $        268,800 $          98,100
Overall total fixed cost =108900+268800+98100 = $        475,800
Calculation of Break even point
Breakeven point = Total Fixed cost = $        475,800
Weighted Contribution margin 44.80%
Breakeven point = $                                                               1,062,054
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