A company produces and sells two products. It sells these products through different channels, and makes them in separate factories. The products have no shared costs. This year there were 42,000 units of each product sold. Contribution margin income statements follow. Sales Variable costs Contribution margin Fixed costs Income Product 1 Product 2 Complete this question by entering your answers in the tabs below. Product 1 Numerator $ 735,000 441,000 294,000 110,500 $ 183,500 Numerator Product 2 $ 735,000 73,500 661,500 478,000 $ 183,500 For Product 1, compute the contribution margin ratio, the break-even point in dollar sales, and the degree of operating leverage. If sales in dollars increase by 10% for this product, compute income. Contribution Margin Ratio Denominator Break-Even Point in Dollars Denominator = = Contribution margin ratio Break-even point in dollars 0
A company produces and sells two products. It sells these products through different channels, and makes them in separate factories. The products have no shared costs. This year there were 42,000 units of each product sold. Contribution margin income statements follow. Sales Variable costs Contribution margin Fixed costs Income Product 1 Product 2 Complete this question by entering your answers in the tabs below. Product 1 Numerator $ 735,000 441,000 294,000 110,500 $ 183,500 Numerator Product 2 $ 735,000 73,500 661,500 478,000 $ 183,500 For Product 1, compute the contribution margin ratio, the break-even point in dollar sales, and the degree of operating leverage. If sales in dollars increase by 10% for this product, compute income. Contribution Margin Ratio Denominator Break-Even Point in Dollars Denominator = = Contribution margin ratio Break-even point in dollars 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:A company produces and sells two products. It sells these products through different channels, and makes them in
separate factories. The products have no shared costs. This year there were 42,000 units of each product sold.
Contribution margin income statements follow.
Sales
Variable costs
Contribution margin
Fixed costs
Income
Product 1
Complete this question by entering your answers in the tabs below.
Product 2
Product 1
$ 735,000
441,000
294,000
110,500
$ 183,500
Numerator
For Product 1, compute the contribution margin ratio, the break-even point in dollar sales, and the degree of operating
leverage. If sales in dollars increase by 10% for this product, compute income.
Numerator
Product 2
$ 735,000
73,500
661,500
478,000
$ 183,500
1
Contribution Margin Ratio
Denominator
Break-Even Point in Dollars
Denominator
=
Contribution margin ratio
Break-even point in dollars
0
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