Question
Smithen Company, a wholesale distributor, has been operating for only a few months. The company sells three products-sinks. mirrors, and vanities. Budgeted sales by
Smithen Company, a wholesale distributor, has been operating for only a few months. The company sells three products-sinks. mirrors, and vanities. Budgeted sales by product and in total for the coming month are shown below based on planned unit sales as follows: Units Percentage Sinks 1,000 sex Mirrors 500 25% Vanities 500 25% Total 2,000 100% Percentage of total sales Sinks 48% Product Mirrors Vanities 20% 32% Total 100% Sales $264,000 100.00% Variable expenses 80,000 30.30% Contribution margin $184,000 69.70% $110,000 72,000 $ 38,000 100.00% $176,000 100.00% $550,000 100.00% 65.45% 82,000 46.59% 219,300 34.55% $94,000 53.41% 330,700 39.87% 60.13% Contribution margin per unit $184.00 $ 76.00 $188.00 Fixed expenses Operating income 293,300 $ 37,400 Break-even point in sales dollars Fixed expenses Overall CM ratio $293,300 0.60 $487,798.61 Break-even point in unit sales:
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