Assume MIX Inc. has sales volume of $1,000,000 for two products with June sales and contribution margin

Question:

Assume MIX Inc. has sales volume of $1,000,000 for two products with June sales and contribution margin ratios as follows:

Product A: Sales $500,000; contribution margin Ratio 30%

Product B: Sales $500,000; contribution margin Ratio 60%

Required:

Assume MIX’s fixed expenses are $300,000. Calculate the June total contribution margin, operating income, average contribution margin ratio, and breakeven sales volume. Refer to your answers for Mini-Exercise 12.6 and explain why MIX is expiring such different operating results from May to June when total sales volume is $1,000,000 in both months.

Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...

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