MULTIPLE-PRODUCT BREAK EVEN, BREAK-EVEN SALES REVENUE Refer to the data in Exercise 15-32. Suppose that in the coming year, Switzer plans to produce an extra-thick yoga mat for sale to health clubs. The company estimates that 20,000 mats can be sold at a price of $18 and a variable cost per unit of $13. Fixed costs must be increased by $48,350 (making total fixed costs of $118,350). Assume that anticipated sales of the other products, as well as their prices and variable costs, remain the same.

Required:

. What is the sales mix of DVDs, equipment sets, and yoga mats?

. Compute the break-even quantity of each product.

. Prepare an income statement for Switzer for the coming year. What is the overall contribution margin ratio? The overall break-even sales revenue?

. Compute the margin of safety for the coming year in sales dollars. (Round the contribution margin ratio to three significant digits; round the break-even sales revenue to the nearest dollar.)

Exercise