2.Sanchez Co. sells two models of doghouses, the Puppy Palace and the Canine Castle. Puppy Palace Canine Castle RM RM Sales price per unit 50 75 Variable cost per unit 30 50 Contribution margin per unit 20 25 Sanchez has determined that it would break even at an annual sales volume of 50,000 units, of which 75% would be Puppy Palaces. Required:

a)What are the contribution margin ratios for each product and the company?

b)What is the amount of Sanchez's estimated annual fixed costs?

c)What is the sales mix?

d)Prepare a product line income statement with operating income of RM400,000. Fixed production costs will increase RM45,000 and fixed administrative costs will increase RM22,500 to support the increase in volume.