Question

The following information is for Alex​ Corp:

Product​ X: Revenue	$11.00
Variable Cost	$3.50
Product​ Y: Revenue	$19.50
Variable Cost	$14.50
Total fixed costs	$22,000

What is the operating​ income, assuming actual sales total 240,000​units, and the sales mix is two units of Product X and one unit of Product​ Y?

A.1,578,000

B.3,320,000

C.1,622,000

D.1,600,000

Answer 1

Answer Calculation of product Mix Actual Units Product X 240,000 Units Total Units * Product X Product X + Product Y 240,000 Units *2 2+1 *2 240,000 Units 3 160,000 Units Product Y Total Units * Product Y Product X + Product Y 240,000 Units *1 2+1 *1 240,000 Units 3 80,000 Units

Calculation operating income Particular Product Y Per Unit Total Units Units Product X Per Unit b $11.00 ($3.50) $7.50 160,000 160,000 Amount C=a*b $1,760,000 $560,000 $1,200,000 $80,000.00 $80,000.00 Revenue Less : Variable Cost Contribution Less : Fixed Cost Operating income $19.50 ($14.50) Amount F=de $1,560,000 ($1,160,000) $400,000 C+F $3,320,000 ($1,720,000) $1,600,000 $22,000) I $1,578,000 Anwer A is Correct