Perez Company produces two products. Budgeted annual income statements for the two products are provided here:

	Power										Lite										Total
	Budgeted	Per					Budgeted				Budgeted	Per					Budgeted				Budgeted	Budgeted
	Number	Unit					Amount				Number	Unit					Amount				Number	Amount
Sales	210	@	$	690		=	$	144,900			840	@	$	600		=	$	504,000			1,050	$	648,900
Variable cost	210	@		410		=		(86,100	)		840	@		420		=		(352,800	)		1,050		(438,900	)
Contribution margin	210	@		280		=		58,800			840	@		180		=		151,200			1,050		210,000
Fixed cost								(21,000	)									(109,000	)				(130,000	)
Net income							$	37,800									$	42,200				$	80,000

Required:

a. Based on budgeted sales, determine the relative sales mix between the two products.

b. Determine the weighted-average contribution margin per unit.

c. Calculate the break-even point in total number of units.

d. Determine the number of units of each product Perez must sell to break even.

e. Verify the break-even point by preparing an income statement for each product as well as an income statement for the combined products.

f. Determine the margin of safety based on the combined sales of the two products

A.

Relative Percentage for Power ________%

Relative Percentage for Lite ________%

B.

Weighted-average contribution margin per unit _______.

C.

Break-even Point ____units

D.

Required sales for Power ______ units

Required sales for Lite _______ units

E.

	Power	Lite	Total
Sales
Variable Costs
Contribution Margin
Fixed Cost
Net Income(Loss)

F. Margin of Safety ________ %