Question
Sheffield Chance Co. sells computers and video game systems. The business is divided into two divisions along product lines. Variable costing income statements for the
Sheffield Chance Co. sells computers and video game systems. The business is divided into two divisions along product lines. Variable costing income statements for the current year are presented below:
| Computers | VG Systems | Total | |||||
|---|---|---|---|---|---|---|---|
| Sales | $660,000 | $440,000 | $1,100,000 | ||||
| Variable costs | 462,000 | 352,000 | 814,000 | ||||
| Contribution margin | $198,000 | $88,000 | 286,000 | ||||
| Fixed costs | 225,420 | ||||||
| Net income | $60,580 |
Determine the sales mix and contribution margin ratio for each division.
| Computers | VG Systems | |||||
|---|---|---|---|---|---|---|
| Sales mix |
| % |
| % | ||
| Contribution margin ratio |
| % |
| % | ||
|
|
Calculate the companys weighted-average contribution margin ratio.
| Weighted-average contribution margin ratio | % |
Calculate the companys break-even point in sales dollars.
| Break-even point | $ |
Determine the sales level, in dollars, for each division at the break-even point.
| Computers | VG Systems | |||
|---|---|---|---|---|
| Break-even point | $ |
| $ |
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Managerial Accounting Tools for business decision making
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
6th Edition
978-0470477144, 1118096894, 9781118214657, 470477148, 111821465X, 978-1118096895
