Malibu Corporation has monthly fixed costs of $66,000. It sells two products for

Question

Malibu Corporation has monthly fixed costs of $66,000. It sells two products for which it has provided the following information: Sales Price Contribution Margin Product 1 $ 10 $ 6 Product 2 $ 10 $ 3 a. What total monthly sales revenue is required to break even if the relative sales mix is 40 percent for Product 1 and 60 percent for Product 2? (Round your answer to the nearest dollar amount. Omit the "$" sign in your response) Sales revenue $ b. What total monthly sales revenue is required to earn a monthly operating income of $12,000 if the relative sales mix is 25 percent for Product 1 and 75 percent for Product 2? (Round your answer to the nearest dollar amount. Omit the "$" sign in your response) Sales revenue $ Thanks!

Explanation / Answer

a. breakeven point = 66000/(40%*6 + 60%*3) =15714.2857142857 total monthly sales revenue to breakeven = 40%*15714.2857142857*10 + 60%*15714.2857142857*10 =$157143 b. breakeven point = (66000+12000)/(25%*6 + 75%*3)=20800 sales revenue = 20800*10 = $208,000

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