Personal Electronix sells iPads and iPods. The business is divided into two divisions along product lines. CVP income statements for a recent quarter's activity are presented below.
|
iPad Division
|
iPod Division
|
Total
|
|
Sales
|
$600,000
|
$400,000
|
$1,000,000
|
|
Variable costs
|
420,000
|
260,000
|
680,000
|
|
Contribution margin
|
$180,000
|
$140,000
|
320,000
|
|
Fixed costs
|
|
|
120,000
|
|
Net income
|
|
|
$ 200,000
|
Instructions
(a) Determine sales mix percentage and contribution margin ratio for each division.
(b) Calculate the company's weighted-average contribution margin ratio.
(c) Calculate the company's break-even point in dollars.
(d) Determine the sales level in dollars for each division at the break-even point.