Malibu Corporation has monthly fixed costs of $69,000. It sells two products for

Question

Malibu Corporation has monthly fixed costs of $69,000. It sells two products for which it has provided the following information:

What total monthly sales revenue is required to break even if the relative sales mix is 30 percent for Product 1 and 70 percent for Product 2? (Round your answer to the nearest dollar amount.)

     

What total monthly sales revenue is required to earn a monthly operating income of $16,000 if the relative sales mix is 20 percent for Product 1 and 80 percent for Product 2? (Round your answer to the nearest dollar amount.)

     

Sales Price Contribution Margin   Product 1 $15         $9                 Product 2 20         4            

Explanation / Answer

A Product 1 Product 2 Fixed costs 1.5 2 Fixed cost = Sales price - profit - Contribution margin Contribution Margin 9 4 Sales Price 15 20 Proift 4.5 14 Break-even Sales 4591 3446 Break-even Sales = fixed cost Price per unit - Varible cost B Total monthly sales 3556 1143 Total monthly sales = profit / profit per unit

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