Question
Sales Mix and Break-Even Analysis Michael Company has fixed costs of $1,980,720. The unit selling price, variable cost per unit, and contribution margin per unit
Sales Mix and Break-Even Analysis
Michael Company has fixed costs of $1,980,720. The unit selling price, variable cost per unit, and contribution margin per unit for the company's two products are provided below.
Product | Selling Price | Variable Cost per Unit | Contribution Margin per Unit | ||||||
Q | $480 | $200 | $280 | ||||||
Z | 680 | 440 | 240 |
The sales mix for products Q and Z is 55% and 45%, respectively. Determine the break-even point in units of Q and Z. If required, round your answers to the nearest whole number.
a. Product Q units b. Product Z units
Operating Leverage
Cartersville Company reports the following data:
Sales $592,700 Variable costs 385,300 Fixed costs 156,800
Determine Cartersville Company's operating leverage. Round your answer to one decimal place.
Margin of Safety
The Ira Company has sales of $800,000, and the break-even point in sales dollars is $568,000.
Determine the company's margin of safety as a percent of current sales. Enter your answer rounded to one decimal place. %
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