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Long Beach Solar Systems, Inc. sells solar water heating and solar power systems. The business...

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Accounting

Long Beach Solar Systems, Inc. sells solar water heating and solar power systems.

The business is divided into two divisions along product lines.

Variable costing income statements for the current 2021 year are presented below:

Water Heat Power Systems Total

Sales $250,000 $750,000 $1,000,000

Variable costs 165,000 330,000 495,000

Contribution margin $85,000 $ 420,000 505,000

Fixed costs 410,000

Net income $ 95,000

Required:

(a) Determine the sales mix and contribution margin ratio for each division.

(b) Calculate the companys weighted-average contribution margin ratio.

(c) Calculate the companys breakeven point in dollars.

(d) Determine the sales level, in dollars, for each division at the breakeven point.

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