Question
Peak Company sells three different products that are similar but are differentiated by various product features. Budgeted sales by product and in total for the
- Peak Company sells three different products that are similar but are differentiated by various product features. Budgeted sales by product and in total for the coming year are shown in the table:
Budgeted sales
Product
Standard
Deluxe
Premium
Total
Percentage of total sales
58%
10%
32%
100%
Sales
$120,000
$50,000
$80,000
$250,000
Less: variable costs
36,000
40,000
44,000
120,000
Contribution margin
$84,000
$10,000
$36,000
$130,000
Less: fixed expenses
$117,000
Net operating income
$13,000
- If the actual percentage of sales for the year were Standard, 50%; Deluxe, 40%; and Premium, 10%, then: Choose one Multiple choice
The overall contribution margin would decrease and break-even sales would increase
The overall contribution margin would increase and break-even sales would decrease.
The overall contribution margin would increase and break-even sales would increase.
The overall contribution margin would decrease and break-even sales would decrease.
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
