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fiasKO [112]
2 years ago
6

Blue Chance Co. sells computers and video game systems. The business is divided into two divisons along product lines. Variable

costing income statements for the current year are presented below:
Computer VG Systems Total

Sales $700,000 $300,000 $1,000,000

Variable Costs 420,000 210,000 630,000

Contribution Margin $280,000 $90,000 370,000

Fixed Costs 296,000

Net Income $74,000

Instruction:

A. Determine the sales mix and contribution margin ratio for each division.

B. Calculate the company's weighted average contribution margin ratio.

C. Calculate the company's break-even point in dollars

D. Determine the sales level, in dollar, for each division at the break-even point.
Business
1 answer:
slamgirl [31]2 years ago
7 0

Answer:

ratio = 7 : 3  

Weighted average contribution ratio = 37 %

break-even point = $800,000

sales level = $560,000

Sales level = $240,000

Explanation:

Solution

we know here that contribution margin for computer is express as

contribution margin for computer = \frac{280000}{700000}

contribution margin for computer =  40%

and

Contribution margin for VG Systems is = \frac{90000}{300000}

Contribution margin for VG Systems is = 30%

so  

ratio = (40 + 30 ) : 30 = 7 : 3  

and

Weighted average contribution margin ratio are here

Weighted average contribution ratio = 40% × 0.7 + 30% × 0.3

Weighted average contribution ratio = 37 %

and

break even point in dollars are

break-even point = \frac{296000}{37}

break-even point = $800,000

and

sales level are here

sales level for computer  = 800000 × 70%  

sales level = $560,000

and

Sales level for VG systems: 800000 × 30%

Sales level = $240,000

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Answer:

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Answer:

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