6.1 Product Mix and BEP Blue Chance Co. sells computers and video game systems. The business is divided into two divisions along product lines. Variable costing income statements for the current year are presented below: Computers VG Systems Total Sales $700,000 $300,000 $1,000,000 Variable costs 420,000 210,000 630.000 Contribution margin $280,000 $ 90.000 370,000 Fixed costs 296.000 Net income $ 74,000 Instructions (a) Determine the sales mix and contribution margin ratio for each division. (b) Calculate the company's weighted average contribution margin ratio. (C) Calculate the company's break-even point in dollars. (d) Determine the sales level, in dollars, for each division at the break-even point. Keith Inc, has 4 product lines: sour cream, ice cream, yogurt, and butter. Demand of individual products is not affected by changes in other product lines. 30% of the fixed costs are direct, and the other 70% are allocated. Results of June follow: Sour Cream Ice Cream Yogurt Butter Total Units sold 2,000 500 400 200 3,100 Revenue $10,000 $20,000 $10,000 $20,000 $60,000 Variable departmental costs 6,000 13,000 4,200 4,800 28,000 Fixed costs 5,000 2,000 3,000 7,000 17.000 Net income (loss) $1.000) $5.00 $12.800 $ 8.200 $15.000 Instructions Prepare an incremental analysis of the effect of dropping the sour cream product line, Ans: N/A, LO:6, Bloom: AP, Difficulty: Medium, Min: 4, AACSB: Analytic, AICPA BB: Resource Management, AICPA FN: Decision Modeling, AICPA PC: Problem Solving, IMA: Business Economics