Positronic Products manufactures three lines of heavy equipment for electrical, chemical, and atomic research. Each of the three lines constitutes a third of the total sales of Positronic. The contribution margin ratio is 10 percent for the electrical line, 25 percent for the chemical line, and 65 percent for the atomic research line. Total sales have been forecast at $24,000,000 for the next year, while total fixed costs are expected to be $5,500,000.
a. Prepare a table showing (1) sales, (2) total variable
costs, and (3) the total contribution margin associated
with each product line.
b. At the given sales mix, what is the break even
point in dollars?