Personal Electronix sells iPad and iPhone. The business is divided into two divisions along with product lines. CVP income statements for a recent quarters activity are presented below.

	iPad	iPhone	Total
Sales Revenue	$600,000	$400,000	$1,000,000
Variable Cost	420,000	260,000	680,000
Contribution Margin	180,000	140,000	320,000
Fixed Cost			120,000
Net Income			200,000

Instructions:

a. Determine (1) sales mix percentage, (2) contribution margin ratio for each division.

b. Calculate the companys weighted average contribution margin ratio.

c. Calculate the companys breakeven in units and in dollar amount.

d. Determine the sales level in dollars for each division at the break even.

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Question Four 5p

Ariba Corporation reaches its breakeven point at $3,200,000 of revenues. At present, it is selling 105,000 units and its variable costs are $30. Fixed manufacturing costs $800,000.

1. Compute the contribution margin percentage.

2. Compute the selling price.

3. Compute the margin of safety in units and dollars.