Sales Mix; Multiproduct Break-Even AnalysisMarlin Company, a wholesale distributor, has be...

Sales Mix; Multiproduct Break-Even Analysis

Marlin Company, a wholesale distributor, has been operating for only a few months. The company sells three products–sinks, mirrors, and vanities, Budgeted sales by product and in total for the coming month are shown below:

As shown by these data net operating income is budgeted at $36.400 for the month and break-even sales at $430.000.

Assume that actual sales for the month total $500,000 as planned Actual sales by product are: sinks $160.000: mirrors. $200.000: and vanities $140.000.

Required:

1. Prepare a contribution form at income statement for the month based on actual sales data. Present the income statement in the format shown above.

2. Compute the break-even point in sales dollars for the month based on your actual data.

3. Considering the fact that the company met its $500.000 sales budget for the month the president is shocked at the results shown on your income statement in (1) above. Prepare a brief memo for the president explaining why both the operating results and the break-even point in sales dollars are different from what was budgeted