Problem

Multiproduct Break-Even Analysis ]OKabee Enterpri ses is the distributor for two products....

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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Solutions For Problems in Chapter 5