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Break - Even Analysis & Margin of Safety ( with more than one product ) The Medal Company make two products, Gold and Silver. Sales
BreakEven Analysis & Margin of Safety
with more than one product
The Medal Company make two products, Gold and Silver. Sales and cost data for
these products follow.
Fixed expenses, for the company, are $
Required:
Using the above, complete the following:
a Prepare a contribution form income statement displaying dollar amounts
and percentages for each product and the company as a whole.
b Compute the breakeven point for the company. Calculate this company's
margin safety both in dollars and as a percent.
Assume the company adds a third product, Bronze. Each Bronze will sell for
$ and variable expenses per unit will be $ Sales are anticipated to be
units. Fixed costs will remain unchanged for the company.
a Prepare a contribution form income statement displaying dollar amounts
and percentages for each product and the company as a whole.
b Compute the breakeven point for the company. Calculate this
company's margin safety both in dollars and as a percent.
Bronze has added sales to the company. Why has the breakeven point
increased with the addition of the new product?
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