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Alo Company produces commercial printers. One is the regular model, a basic model that is designed to copy and print in black and white. Another

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Alo Company produces commercial printers. One is the regular model, a basic model that is designed to copy and print in black and white. Another model, the deluxe model, is a color printer-scanner-copier. For the coming year, Alo expects to sell 90,000 regular models and 36,000 deluxe models. A segmented income statement for the two products is as follows: Total Sales Less: Variable costs Contribution margin Less: Direct fixed costs Segment margin Less: Common fixed costs Operating income Regular Model $13,500,000 9,450,000 $ 4,050,000 1,200,000 $ 2,850,000 Deluxe Model $10,800,000 6,480,000 $ 4,320,000 960,000 $ 3,360,000 $24,300,000 15,930,000 $ 8,370,000 2.160,000 $ 6,210,000 1,280,000 $ 4,930,000 REQUIRED: 1. Compute the number of regular models and deluxe models that must be sold to break even. 2. Using information only from the total column of the income statement, compute the sales revenue that must be generated for the company to break even. (Round the contribution margin ratio to four significant digits and the sales revenue to the nearest dollar.) ANSWER Check Figures: Revenue = $9,988,386

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