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Munoz Company produces two products. Budgeted annual income statements for the two products are provided as follows. Power Lite Total Budgeted Number Per Unit Budgeted
Munoz Company produces two products. Budgeted annual income statements for the two products are provided as follows. Power Lite Total Budgeted Number Per Unit Budgeted Amount Budgeted Number Per Unit Budgeted Amount Budgeted Number Budgeted Amount Sales 100 @ $660 = $66,000 900 @ $560 = $504,000 1,000 $570,000 Variable cost 100 @ 400 = (40,000) 900 @ 370 = (333,000) 1,000 (373,000) Contribution margin 100 @ 260 = 26,000 900 @ 190 = 171,000 1,000 197,000 Fixed cost (20,000) (137,600) (157,600) Net income $6,000 $33,400 $39,400 Required: Based on budgeted sales, determine the relative sales mix between the two products. Determine the weighted-average contribution margin per unit. Calculate the break-even point in total number of units. Determine the number of units of each product Munoz must sell to break even. Verify the break-even point by completing the following income statement. Determine the margin of safety based on the combined sales of the two products
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