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    Multi Product Break-Even Analysis

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    Irle Enterprises is the distributor for two products. Model A100 and Model B900. Monthly sales and the contribution margin ratios for the two products follow:

    Product
    Model A 100 Model B 900 Total
    Sales $700,000 $300,000 $1,000,000
    Contribution margin ratio 60% 70% ?

    The company's fixed expenses total $598,500 per month.

    Required:

    1.)Prepare a contribution format income statement for the company as a whole.

    2.) Compute the break-even point for the company based on the current sales mix.

    3.) If sales increase by $50,000 per month, by how much would you expect net operating income to increase? What are your assumptions?

    © BrainMass Inc. brainmass.com October 9, 2019, 10:59 pm ad1c9bdddf
    https://brainmass.com/business/financial-ratios/multi-product-break-even-analysis-240341

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    The solution examines a multi product break-even analysis. The expert prepares a contribution format income statement for the company as a whole.

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