Nobel Company sells three products: X, Y, and Z. Budgeted sales by product and in total for the coming month are as follows:

	Product X	Product Y	Product Z	Total
% of total sales	30%	50%	20%	100%
Sales	$225,000	100%	$375,000	100%	$150,000	100%	$750,000	100%
Variable expenses	67,500	30%	300,000	80%	82,500	55%	450,000	60%
Contribution margin	$157,500	70%	$ 75,000	20%	$ 67,500	45%	$300,000	40%
Fixed expense							196,000
Operating income							$104,000

As shown by these data, operating income is budgeted at $104,000 for the month.

Assume that actual sales for the month total $750,000 as planned. Actual sales by product, however, are: X = $195,000 Y = $435,000 Z = $120,000

Required:

1. Calculate the break-even sales for the coming month, based on budgeted data. (4 marks)

1. Prepare contribution income statement for the month based on actual sales data. Assume variable expenses are a percentage of sales and total fixed expenses are the same as budgeted. Present the income statement in the same format as shown above. (16 marks)

1. Calculate the break-even sales for the month, based on actual data. (4 marks)

1. Explain why the company did not meet the budgeted operating income or break-even sales even though it met its $500,000 sales budget. (5 marks)