Reference no: EM133163739

Question 1 - A business produces and sells two models of its product, Small and Large. Here are the results for April.

	Small	Large	Total
Sales revenue	$30,000	$120,000	$150,000
Variable manufacturing expenses	$13,000	$49,500	$62,500
Variable selling expenses	$5,000	$15,000	$20,000
Fixed costs  (common to both products)			$37,800
Net income			$29,700

What is the break-even in sales dollars for this April sales mix?

Question 2 - Assume in May- the only change is that the $150,000 in sales revenue is split evenly between the two products (the sales mix changes). The selling prices per unit and contribution margins per unit of the products do not change and fixed costs do not change. What is the break-even level of sales revenue compared to the amount computed for April?

a. it will be lower than with April facts

b. it will be higher than with April facts

c. it will not change from the answer to the prior question

d. cannot be determined with this information