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Multiple-Product Breakeven, Break-Even Sales Revenue Peace River Products, Inc. produces and sells yoga-training products: how-to DVDs and a basic equipment set (blocks, strap, and small
Multiple-Product Breakeven, Break-Even Sales Revenue Peace River Products, Inc. produces and sells yoga-training products: how-to DVDs and a basic equipment set (blocks, strap, and small pillows). Last year, Peace River Products sold 18,000 DVDs and 4,500 equipment sets. Information on the two products is as follows: PRICE: DVD's $8 Equipment: $25 Variable cost per unit: DVD:4 Equipment :16 Total fixed cost is $85,000. Suppose that in the coming year, the company plans to produce an extra-thick yoga mat for sale to health clubs. The company estimates that 9,000 mats can be sold at a price of $18 and a variable cost per unit of $13. Total fixed cost must be increased by $29,100 (making total fixed cost $114,100). Assume that anticipated sales of the other products, as well as their prices and variable costs, remain the same. Compute the break-even quantity of each product. Break even DVD: Break even equipment sets: Break even yoga mats: (All units) Prepare an income statement for Peace River Products for the coming year. sales total variable cost contribution margin total fixed cost operating income 3b. What is the overall contribution margin ratio? The overall break-even sales revenue? (Round the ratio to three decimal places before converting to a percentage. For example, 0.8836 would be rounded to 0.884 and entered as 88.4%. Also round overall break-even sales revenue to the nearest dollar.) Overall contribution margin ratio Overall break-even sales revenue 4.Compute the margin of safety for the coming year in sales dollars. (Note: Round the contribution margin ratio to three decimal places; round the break-even sales revenue to the nearest dollar.) Round your final answer to the nearest dollar
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