Compute the break- even point for a multi-product company and explain the effects of shifts in the sales mix on contribution margin and the break-even point.

Multiproduct Break-Even Analysis: The relative quantities in which a company's products are sold are referred to as the sales mix. Companies usually have a variety of products with varying profit margins. Businesses can utilize sales mix to find the best combination of products and services to maximize earnings. Profits will typically be larger if high margin products make for a significant share of total sales (Garrison et al., 2014). Assuming the sales mix is constant, the contribution and break-even for Sixfold Ltd. will be: Product $ $22,000 A % 100% Product $ $50,000 B % 100% Product $ $25,000 Total $ $97,000 % 100% Sales 100% Variable ($12,000) (54.5%) ($30,000) (60%) ($10,000) (40%) ($52,000) (53.6%) Costs Contribution $10,000 45.5% $20,000 40% $15,000 60% $45,000 46.4% Margin Fixed Cost ($5,000) $40,000 Net Operating income Sales Mix $22,000 22.7% $50,000 51.5% $25,000 25.8% $97,000 100%