Question

Answer the following questions using the information below: The following information is for Barnett Corporation: Product X: Revenue $10.00 Variable Cost $2.50 Product Y: Revenue $15.00 Variable Cost $5.00 Total fixed costs $50,000 What is the operating income, assuming actual sales total 150,000 units, and the sales mix is two units of Product X and one unit of Product Y? $1,750,000 None of these answers are correct. $1,200,000 $1,250,000 1 Proctorio is sharing van

Answer 1

Answer - C ($1,200,000)

	Product A	product B
Sales mix ratio	2	1
Units sold	100000	50000	150000
Price per unit	$ 10.00	$ 15.00
Variable cost per unit	$ 2.50	$ 5.00
INCOME STATEMENT:
Sales revenue	$ 1,000,000	$ 750,000	$ 2,500,000
Less: Variable cost	$ 250,000	$ 250,000	$ 750,000
Contribution margin	$ 7,50,000	$ 500,000	$   1,250,000
Less: Fixed cost			$ 50,000
Operating income			$   1,200,000

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