Multiproduct Break-Even Analysis ]
OKabee Enterpri ses is the distributor for two products. Model A100 and Model B900. Monthly, and the contribution margin ratio, for the two products follow:
| Product |
| |
| Model A100 | Model 8900 | Total |
Sales | $700,000 | $300,000 | $1,000,000 |
Contribution margin ratio | 60% | 70% | ? |
The company's fixed expenses total $598,500 per month
Requried:
1. Prepare a contribution format income statement for the company as a whole.
2. Compute the break-even point for the company based on the current sales mix.
3. If sales increase by $50.000 per month, by how much would you expect net operating income to increase? What are your assumptions?
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