Hi, I\'m in managerial accounting and I\'m struggling with this question. Person
ID: 2539263 • Letter: H
Question
Hi, I'm in managerial accounting and I'm struggling with this question.
Personal Electronix sells iPads and iPods. The business is divided into two divisions along product lines. CVP income statements for a recent quarter’s activity are presented below.
iPad Division
iPod Division
Total
Sales $806,400 $473,600 $1,280,000
Variable costs 580,608 265,216 845,824
Contribution margin $225,792 $208,384 434,176
Fixed costs 137,376
Net income $296,800
Find: Sales Mix Percentage for iPod and iPad division
Unit contribution margin ratio for each division
Weighted Avg Contribution margin ratio for each division
Company's break even point in dollars
Break even sales
Explanation / Answer
Answer
iPad Division
iPod Division
Total
Sales
$806400
$473600
$1280000
Sales Mix Percentage
63% [806400/1280000]
37% [473600/1280000]
iPad Division
iPod Division
A
Contribution margin
$225792
$208384
B
Sales
$806400
$473600
C=A/B
Contribution Margin ratio
28%
44%
iPad Division
iPod Division
Total
A
Contribution Margin ratio
28.00%
44.00%
B
Sales Mix Percentage
63.00%
37.00%
C=A x B
Weighted Average Contribution margin ratio
17.64%
16.28%
33.92%
A
Fixed Costs
$137376
B
Weighted Average Contribution margin ratio
$33.92%
C=A/B
Break Even point in Dollar Sales
$405000
D=C x 63%
iPad Division Break Even Sales
$255150
E= C x 37%
iPod Division Break Even Sales
$149850
iPad Division
iPod Division
Total
Sales
$806400
$473600
$1280000
Sales Mix Percentage
63% [806400/1280000]
37% [473600/1280000]
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