Question
Rastacan Enterprises distributes two products: Model X300 and Model Z900. Monthly sales and the contribution margin ratios for the two products follow: Product : Model
Rastacan Enterprises distributes two products: Model X300 and Model Z900. Monthly sales and the contribution margin ratios for the two products follow: Product : Model X300 Model Z900 Total Sales: $700,000 $300,000 $1,000,000 Contribution Margin Ratio 60% 70% ? The company's fixed expenses total $598,500 per month. 1. Prepare a contribution-format income statement for the company as a whole. 2. Compute the break-even point for the company based on the current sales mix. 3. If sales increase by $50,000 per month, by how much would you expect operating income to increase? What are your assumptions?
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