Determine the sales of audio

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Reference no: EM131809806

Question - This is a Multiproduct CVP question:

 

Profitability Analysis for the Year Ended December 31,2010

 

Audio

Video

Car

Total

Sales

$3,200,000

$1,920,000

$1,280,000

$6,400,000

Less variable costs:





Cost of merchandise

$1,900,000

$1,360,000

$610,000

$3,870,000

Salary, part time staff

$180,000

$100,000

$55,600

$335,600

total variable costs

$2,080,000

$1,460,000

$665,600

$4,205,600

Contribution margin

$1,120,000

$460,000

$614,400

$2,194,400

Contribution margin ratio

0.3500

0.2396

0.4800

0.3429

Less direct fixed costs:





Salary, full time staff

$325,000

$240,000

$220,000

$785,000

Total

$795,000

$220,000

$394,400

$1,409,400

Less common fixed costs:





Advertising




$115,000

Utilities




$25,000

Other administrative costs




$570,000

Total common fixed costs




$710,000

Profit




$699,400






Required -

a. Calculate sales needed to achieve a profit of $1,800,000, assuming the current mix.

b. Determine the sales of audio, video, and car products in the total sales amount calculated for (a. the question above).

Reference no: EM131809806

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