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Vernon Company produces two products. Budgeted annual income statements for the two products are provided here: Sales Variable cost Contribution margin Fixed cost Net income
Vernon Company produces two products. Budgeted annual income statements for the two products are provided here: Sales Variable cost Contribution margin Fixed cost Net income Power Budgeted Per Budgeted Number Unit Amount 360 @ $600 = $ 216,000 360 @ 370 = (133,200) 360 @ 230 = 82,800 (10,000) $ 72,800 Lite Total Budgeted Per Budgeted Budgeted Budgeted Number Unit Amount Number Amount 840 @ $580 = $ 487,200 1,200 $ 703,200 840 @ 390 = (327,600) 1,200 (460,800) 840 @ 190 = 159,600 1,200 242,400 (131,400) (141,400) $ 28,200 $ 101,000 Required: a. Based on budgeted sales, determine the relative sales mix between the two products. b. Determine the weighted-average contribution margin per unit. c. Calculate the break-even point in total number of units. d. Determine the number of units of each product Vernon must sell to break even. e. Verify the break-even point by preparing an income statement for each product as well as an income statement for the combined products. f. Determine the margin of safety based on the combined sales of the two products. Complete this question by entering your answers in the tabs below
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