2. Retro Company produces four lines of accessories for a major U.S. tractor manufacturer. The lines are known by the code letters Z, Y, X, and W. The current sales mix for the Retro Company and the contribution margin ratio for these product lines are as follows: Percent of Total Contribution Margin Product Line Sales Ratio 24.50 38.00 Y 40.95 32.00 19.40 22.00 W 15.15 55.00 Total sales for next year are forecast to be $175,000 and total fixed costs $55,000. a. Prepare a table showing the dollar values for: 1) sales, 2) variable costs, and 3) the contribution associated with each product line and the company as a whole. b. Calculate the overall contribution margin ratio and the break-even sales dollars for the Retro Company.
2. Retro Company produces four lines of accessories for a major U.S. tractor manufacturer. The lines are known by the code letters Z, Y, X, and W. The current sales mix for the Retro Company and the contribution margin ratio for these product lines are as follows: Percent of Total Contribution Margin Product Line Sales Ratio 24.50 38.00 Y 40.95 32.00 19.40 22.00 W 15.15 55.00 Total sales for next year are forecast to be $175,000 and total fixed costs $55,000. a. Prepare a table showing the dollar values for: 1) sales, 2) variable costs, and 3) the contribution associated with each product line and the company as a whole. b. Calculate the overall contribution margin ratio and the break-even sales dollars for the Retro Company.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:2. Retro Company produces four lines of accessories for a major U.S. tractor manufacturer. The lines are known by
the code letters Z, Y, X, and W. The current sales mix for the Retro Company and the contribution margin ratio for
these product lines are as follows:
Percent of Total
Contribution Margin
Product Line
Sales
Ratio
24.50
38.00
Y
40.95
32.00
19.40
22.00
W
15.15
55.00
Total sales for next year are forecast to be $175,000 and total fixed costs $55,000.
a. Prepare a table showing the dollar values for: 1) sales, 2) variable costs, and 3) the contribution associated with
each
product line and the company as a whole.
b. Calculate the overall contribution margin ratio and the break-even sales dollars for the Retro Company.
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