Personal Electronix sells iPad and iPhone. The business is divided into two divisions along with...
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Accounting
Personal Electronix sells iPad and iPhone. The business is divided into two divisions along with product lines. CVP income statements for a recent quarters activity are presented below.
iPad
iPhone
Total
Sales Revenue
$600,000
$400,000
$1,000,000
Variable Cost
420,000
260,000
680,000
Contribution Margin
180,000
140,000
320,000
Fixed Cost
120,000
Net Income
200,000
Instructions:
a. Determine (1) sales mix percentage, (2) contribution margin ratio for each division.
b. Calculate the companys weighted average contribution margin ratio.
c. Calculate the companys breakeven in units and in dollar amount.
d. Determine the sales level in dollars for each division at the break even.
Ariba Corporation reaches its breakeven point at $3,200,000 of revenues. At present, it is selling 105,000 units and its variable costs are $30. Fixed manufacturing costs $800,000.
1. Compute the contribution margin percentage.
2. Compute the selling price.
3. Compute the margin of safety in units and dollars.
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