Mega Electronix sells television sets and DVD players. The business is divided into two divisions along product lines. CVP income statements for a recent quarter's activity are presented below.
TV Division DVD Division Total
Sales $600,000 $400,000 $1,000,000
Variable costs 450,000 240,000 690,000
Contribution margin $150,000 $160,000 310,000
Fixed costs 124,000
Net income $ 186,000
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.