Problem 5-1 Multiproduct Break-Even Analysis and target profit analysis

Okabee Enterprises is the distributor for two products, Model A100 and Model B900. Monthly sales and contribution margin ratios for the two products follow:

	Model A100	Model B900	Total
Sales	$700,000	$300,000	$1,000,000
Contribution margin ratio	60%	70%	?

The company's fixed expense total $598,500 per month.

Required 1:

Compute the break-even point for the company based on the current sales mix.

Required 2:

How much sales revenues the company has to generate from Model A100 and Model B900 in order to break even?

Required 3:

How much sales revenues the company has to generate in order to achieve a target profit of $346,500?