Question
A business produces and sells two models of its product, Small and Large.Here are the results for April. Small Large Total Sales revenue $30,000 $120,000
A business produces and sells two models of its product, Small and Large.Here are the results for April.
Small | Large | Total | |
Sales revenue | $30,000 | $120,000 | $150,000 |
Variable manufacturing expenses | $13,000 | $49,500 | $62,500 |
Variable selling expenses | $5,000 | $15,000 | $20,000 |
Fixed costs(common to both products) | $37,800 | ||
Net income | $29,700 |
What is the break-even in sales dollars for this April sales mix?
Round any %'s to the nearest tenth of a %. (i.e. .25333 = 25.3%) and choose the closest answer.
a. | $64,900 | |
b. | $87,700 | |
c. | $67,500 | |
d. | $84,000 | |
e. | $120,300 |
Assume in May-theonlychange is that the $150,000in sales revenue is split evenly between the two products (the sales mix changes).The selling prices per unit and contribution margins per unit of the products do not change and fixed costs do not change.What is the break-even level of sales revenuecomparedto the amount computed for April?
| a. | it will be lower than with April facts | |
| b. | it will be higher than with April facts | |
| c. | it will not change from the answer to the prior question | |
| d. | cannot be determined with this information |
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
