Question
Galaxy Electronics, Inc. sells computers and video game systems. The business is divided into two divisions along product lines. Variable costing income statements for the
Galaxy Electronics, Inc. sells computers and video game systems. The business is divided into two divisions along product lines. Variable costing income statements for the current 2020 year are presented below:Computers VG Systems TotalSales $700,000 $300,000 $1,000,000 Variable costs 420,000 210,000 630,000 Contribution margin $280,000$ 90,000 370,000 Fixed costs 296,000 Net income $74,000
Required:
(a) Determine the sales mix and contribution margin ratio for each division.
(b) Calculate the companys weighted-average contribution margin ratio.
(c) Calculate the companys break-even point in dollars.
(d) Determine the sales level, in dollars, for each division at the break-even point.
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