Problem

Malibu Corporation has monthly fixed costs of $63,000. It sells two products for which it...

Malibu Corporation has monthly fixed costs of $63,000. It sells two products for which it has provided the following information:

 

Sales Price

Contribution Margin

Product 1

$10

$6

Product 2

10

3

a.    What total monthly sales revenue is required to break even if the relative sales mix is 40 percent for Product 1 and 60 percent for Product 2?


b. What total monthly sales revenue is required to earn a monthly operating income of $12,000 if the relative sales mix is 25 percent for Product 1 and 75 percent for Product 2?

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