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Best Farm sells cat food and dog food. Its monthly fixed costs average $400,000. Cat food sales represent 80% of the company's total revenue. Dog
Best Farm sells cat food and dog food. Its monthly fixed costs average $400,000. Cat food sales represent 80% of the company's total revenue. Dog food sales constitute the remaining 20%. The company has provided the following information expressed on a per-case basis:
Sales | Conribution Conribution | Sales | Margin |
Price | Margin Margin % | Share % | Mix |
Cat Food | 50 | 15 |
Dog Food | 30 | 6 |
Calculate: (show your calculations and round to 2 decimal places)
- What is the Average Contribution Margin Ratio?
- What is the total monthly Sales Revenue in Dollars required to break-even?
- What is is the total monthly Sales Revenue required to earn an Operating Income of $135,000?
- What is the companys Margin of Safety at a monthly Sales level of $2,500,000?
- If monthly fixed costs increase by $10,000, the break-even point, expressed in sales dollars, will increase to how many dollars?
- How does break-even sales in (E) with increased fixed costs change if the product mix changes to 50% / 50%. The new break-even point in $ is?
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