Intermediate: Profit-volume graph and changes In sales mix A company produces and sells two products with the following costs:

Total sales revenue is currently generated by the two products in the following proportions:

Product X 70%
Product Y 30%

Required:

(a) Calculate the break-even sales revenue per period, based on the sales mix assumed above. (6 marks)

(b) Prepare a profit-volume chart of the above s~uation for sales revenue up to £4000000. Show on the same chart the effect of a change in the sales mix to product X SO%, product Y 50%. Clearly indicate on the chart the break-even point for each situation. (11 marks)

(c) Of the fixed costs £455000 are attributable to product X.
Calculate the sales revenue required on product X in order to recover the attributable fixed costs and provide a net contribution of £700 000 towards general fixed costs and .

Transcribed Image Text:

Product X Product Y 0.6 1212000 per period Variable costs (per of sales) 0.45 Fixed costs