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A company produces and sells two products. It sells these products through different channels, and makes them in separate factories. The products have no shared
A company produces and sells two products. It sells these products through different channels, and makes them in separate factories. The products have no shared costs. This year there were 42,000 units of each product sold. Contribution margin income statements follow. Sales Variable costs Contribution margin Fixed costs Income Product 1 Complete this question by entering your answers in the tabs below. Product 2 Numerator Product 1 $ 735,000 441,000 294,000 110,500 $ 183,500 For Product 1, compute the contribution margin ratio, the break-even point in dollar sales, and the degree of operating leverage. If sales in dollars increase by 10% for this product, compute income. Numerator Numerator 1 1 1 1 1 1 Product 2 $ 735,000 73,500 661,500 478,000 $ 183,500 X X Contribution Margin Ratio Denominator Break-Even Point in Dollars Denominator Degree of Operating Leverage (DOL) Denominator Change in income (%) from 10% Sales increase = 0 0 0 D
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