[The following information applies to the questions displayed below.] Vanna Co.

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[The following information applies to the questions displayed below.]

Vanna Co. produces and sells two products, T and O. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company sold 41,000 units of each product. Sales and costs for each product follow.

Compute the break-even point in dollar sales for each product. (Enter CM ratio as percentage rounded to 2 decimal places.)

Vanna Co. produces and sells two products, T and O. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company sold 41,000 units of each product. Sales and costs for each product follow.

Explanation / Answer

Soluiton:

Particulars Product T Product O Sales $733,900 $733,900 Variable Cost $440,340 $73,390 Contribution $293,560 $660,510 Contrbution to Sales Ratio 40% 90% Fixed Cost $180,560 $547,510 For break even point - Required contribution should be equal to fixed Cost $180,560 $547,510 Break even Point in dollar Sales (Required contribution / Contribution to Sales ratio) $451,400 $608,344

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