Fidelity Multimedia sells audio and video equipment and car stereo products. After performing a study of fixed and variable costs in the prior year, the company prepared a product-line profit statement as follows:

Required
a. Calculate the contribution margin ratios for the audio, video, and car product lines.
b. What would be the effect on profit of a $125,000 increase in sales of audio equipment compared with a $125,000 increase in sales of video equipment or a $125,000 increase in sales of car equipment? Based on this limited information, which product line would you recommend expanding?
c. Calculate the break-even level of sales dollars for the company as a whole. (Round to the nearest dollar.)
d. Calculate sales needed to achieve a profit of $1,800,000, assuming the current mix. (Round to the nearest dollar.)
e. Determine the sales of audio, video, and car products in the total sales amount calculated for part d. (Round to the nearest dollar.)

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Fidelity Multimedia Proftability Analysis For the Year Ended December 31, 2014 Audio Video Car Total Sales Less variable costs: S3,250,000 $1,950,000 $1,300,000 $6,500,000 920,000 374,000 192,500 Cost of merchandise 617,000 59,000 676,000 624,000 3,911,000 359,500 4,270,500 2,229,500 Salary, part-time staff Total variable costs 108,000 468,000 240,000 2,112500 1482,000 1,137,500 Contribution margin Less direct fixed costs: Salary,full-time staff Total Less common fixed costs: 220,000785,000 $812,500 228,000 404,000 1,444,500 325,000 Advertising Utilities Other administrative costs 115,000 25,000 Total common fixed costs Profit 710,000 S 734,500