The Double Arthur Company (DAC) has three product lines of coffee mugs — Earth, Sun and Mun — with contribution margins of $9, $8, and $5 respectively. The president Maxat Jexembay foresees sales, consisting of 1/6 units of Earth, 1/2 units of Sun, and 1/3 units of Mun. The company’s fixed costs for the period are $600000. Required: 1. If the sales mix is maintained, what is the total contribution margin when 220,000 units are sold? 2. If the sales mix is maintained, what is the operating income when 220,000 units are sold?

The Double Arthur Company (DAC) has three product lines of coffee mugs — Earth, Sun and Mun — with contribution margins of $9, $8, and $5 respectively. The president Maxat Jexembay foresees sales, consisting of 1/6 units of Earth, 1/2 units of Sun, and 1/3 units of Mun. The company’s fixed costs for the period are $600000. Required: 1. If the sales mix is maintained, what is the total contribution margin when 220,000 units are sold? 2. If the sales mix is maintained, what is the operating income when 220,000 units are sold?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 7EB: Oat Treats manufactures various types of cereal bars featuring oats. Simmons Cereal Company has...

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