Mad City Flash sells computers and video game systems. The business is divided into two divisions along product lines. Variable costing income statements for the current year are presented below: Computers VG Systems Total Sales $800,000 $200,000 $1,000,000 Variable costs 480,000 140,000 620,000 Contribution margin $320,000 $ 60,000 380,000 Fixed costs 228,000 Net income $ 152,000 Instructions (show calculations): a) Determine the sales mix, and contribution margin ratio for each division. b) Calculate the company's weighted-average contribution margin ratio. c) Calculate the company's break-even point in dollars. d) Determine the sales level, in dollars, for each division at the break-even point.
Mad City Flash sells computers and video game systems. The business is divided into two divisions along product lines. Variable costing income statements for the current year are presented below: Computers VG Systems Total Sales $800,000 $200,000 $1,000,000 Variable costs 480,000 140,000 620,000 Contribution margin $320,000 $ 60,000 380,000 Fixed costs 228,000 Net income $ 152,000 Instructions (show calculations): a) Determine the sales mix, and contribution margin ratio for each division. b) Calculate the company's weighted-average contribution margin ratio. c) Calculate the company's break-even point in dollars. d) Determine the sales level, in dollars, for each division at the break-even point.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Mad City Flash sells computers and video game systems. The business is divided into two divisions along
product lines. Variable costing income statements for the current year are presented below:
Computers
VG Systems
Total
Sales
$800,000
$200,000
$1,000,000
Variable costs
480,000
140,000
620,000
Contribution margin $320,000
$ 60,000
380,000
Fixed costs
228,000
Net income
$ 152,000
Instructions (show calculations):
a)
Determine the sales mix, and contribution margin ratio for each division.
b) Calculate the company's weighted-average contribution margin ratio.
C) Calculate the company's break-even point in dollars.
d) Determine the sales level, in dollars, for each division at the break-even point.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa1c53fc7-bb90-4175-b288-eb1dcbf34cff%2F89e4855a-f1cd-4cfa-bb7a-f887912eb7ff%2Fjw3iz0f_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Mad City Flash sells computers and video game systems. The business is divided into two divisions along
product lines. Variable costing income statements for the current year are presented below:
Computers
VG Systems
Total
Sales
$800,000
$200,000
$1,000,000
Variable costs
480,000
140,000
620,000
Contribution margin $320,000
$ 60,000
380,000
Fixed costs
228,000
Net income
$ 152,000
Instructions (show calculations):
a)
Determine the sales mix, and contribution margin ratio for each division.
b) Calculate the company's weighted-average contribution margin ratio.
C) Calculate the company's break-even point in dollars.
d) Determine the sales level, in dollars, for each division at the break-even point.
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