P6-9B. Multiple Product Break-Even and Net Income Planing Madison Company manufa

Question

P6-9B. Multiple Product Break-Even and Net Income Planing Madison Company manufactures and L04 sells the following three products: SER MER Red Blue Green Unit sales 20,000 $30 30,000 $62 $38 50,000 $18 $14 Unit variable cost $18 Required Assume that total fixed cost is $324,800. a. Compute the net income before income tax based on the sales volumes shown above. b. Compute the break-even point in total dollars of revenue and in specific unit sales volume for each product. r break-even calculations by computing the total contribution margin related to your answer in requirement (b).

Explanation / Answer

Answer

A. Net income before income tax

Net income =Contribution margin - Fixed cost

= $1160000 - $324800 =$835200

B.

BEP in units = Fixed cost =$324800/11.60

                   =28000 units

C.

Red Blue Green Total Contribution margin $12 $24 $4 Units 20000 30000 50000 Total $240000 $720000 $200000 $1160000

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