Solution-Explain what would happen to the overall

Explain what would happen to the overall contribution ratio

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Reference no: EM132832591

Question - Multiproduct Company produces 3 products.

	PRODUCT 1	PRODUCT 2	PRODUCT 3
Price/unit	$5	$6	$7
Variable cost/unit	3	2	4
Expected Sales (units)	100,000	150,000	250,000

Total fixed costs for the company are $1,240,000.

Required -

a) Prepare Income Statement using the format used in class (and in the text for sales mix) for the 3 products above and the company as a whole. Assuming the product mix would be the same at the break-even point as above, compute the Break-even point in sales dollars.

b) Explain what would happen to the overall contribution ratio if we sold 50,000 units of Product 1, 300,000 units of Product 2, and the same units of Product 3? WHY?

Reference no: EM132832591

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Explain what would happen to the overall contribution ratio

Reference no: EM132832591

Reference no: EM132832591

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