Multiproduct Break-Even Analysis [LO9]

Okabee Enterprises is the distributor for two products, Model A100 and Model B900. Monthly sales and the contribution margin ratios for the two products follow:

The company’s fixed expenses total $598,500 per month.
Required:
1. Prepare a contribution format income statement for the company as a whole.
2. Compute the break-even point for the company based on the current sales mix.
3. If sales increase by $50,000 per month, by how much would you expect net operating income to increase? What are your assumptions?

Transcribed Image Text:

Product Model A 100 Model B900 Total Sales... $700,000 $300,000 $1,000,000 Contribution margin ratio. 60% 70% ?