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3. Sales mix and CVP Analysis : Goalies Ball, Inc. produces and sells two different types of soccer goals: basic and premium. Monthly information regarding

3. Sales mix and CVP Analysis: Goalies Ball, Inc. produces and sells two different types of soccer goals: basic and premium. Monthly information regarding the two types of goals are shown below:

Basic

Premium

Total

Sales

$

1,080,000

$720,000

$1,800,000

Variable costs

$315,400

$294,100

$609,500

Fixed expenses are $517,250 per month in total for the company.

  1. Determine the sales mix for the two products
  2. Determine the contribution margin ratio for each of the two products (round your decimal answer to four decimal places, i.e. 0.3149322 = 0.3149 = 31.49%)
  3. Calculate the weighted average contribution margin (WACM) ratio (round your decimal answer to four decimal places, i.e. 0.3149322 = 0.3149 = 31.49%)
  4. Calculate Goalies Balls break-even point in dollars. Round to the nearest cent (i.e. two decimal places)
  5. The manager of Goalies Ball is considering a shift in sales mix, increasing sales of basic goals to 65% and decreasing sales of premium goals to 35%. How would this affect the break-even point in dollars? Briefly explain your answer.

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