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Compute the Break even point.
Rawlings Company prepared the following budget information for the coming year:
Product A
Product B
Product C
Total
Sales
$85,714
$1,000,000
$177,777
$1,263,491
Variable expenses
25,714
800,000
97,777
293,491
Contribution margin
60,000
$200,000
$80,000
340,000
Fixed expenses
255,000
Net operating income
$85,000
The budget assumes the sale of 20,000 units of A, 100,000 units of B, and 80,000 units of C. Required: a. What is the company's break-even point given the sales mix above? b. If the budgeted sales mix is maintained, what is the total contribution margin and net operating income if 300,000 units are sold?
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