Houston-based Advanced Electronics manufactures two types of audio speakers for desktop computers named as model A and model B. Qualities of both models are same. Model A contributes 70 percent of total sales and model B contributes 30 percent of total sales. Variable cost per $ of sales of model A is $0.45 and variable cost per $ of sales is $0.6 for model B.

TOTAL FIXED COST IS $ 1,200,000

Required:

1. Compute break even sales revenue per period.

2. Compute profit for the Company if Companys current sales are $4000,000

3. Compute break even in sales dollars and profit if model A contributes 50% and same as by model B.

4. Suppose $455,000 fixed cost is allocated to model A out of total fixed cost, then calculate the sales revenue that recover the fixed cost plus $700,000 contribution too.

5. Explain your calculation.