TexFab manufactures two products, GT450 and GT600 that have the following sales and cost information.
TexFab manufactures two products, GT450 and GT600 that have the following sales and cost information.
| GT450 | GT600 | Total | ||||
|---|---|---|---|---|---|---|
| Amount | % | Amount | % | Amount | % | |
| Sales | $ 25,000 | 100 | $ 75,000 | 100 | $ 100,000 | 100.0 |
| Variable costs | 20,000 | 80 | 37,500 | 50 | 57,500 | 57.5 |
| Contribution margin | $ 5,000 | 20 | $ 37,500 | 50 | $ 42,500 | 42.5 |
| Fixed costs | 20,000 | |||||
| Operating income | $ 22,500 | |||||
Round all dollar answers up, to the nearest whole number.
Required:
1. What is the breakeven point in dollars if sales remain at the same sales mix reflected in the income statement presented above?
2. If the TexFab Company's sales mix becomes $50,000 of product GT450 and $50,000 of product GT600, what is the breakeven point in sales dollars? Prepare an income statement—in the format given above—for this scenario.
3. Why have the breakeven point and the amount of operating income (πB) changed?
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TexFab manufactures two products, GT450 and GT600 that have the following sales and cost information.
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35
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