sales level in dollars for each division
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Determine the sales level in dollars for each division at the break even point.
Sales Mix Percentage
iPad Division = 600,000 / 1,000,000 = 60%
iPod Division = 400,000 / 1,000,000 = 40%
Contribution Margin Ratio
iPad Division = 180,000 / 600,000 = .30
iPod Division = 140,000 / 400,000 = .35
Weighted Average Contribution Margin
iPad Division = .3 x .6 = .18
iPod Division = .35 x .4 = .14
Total = .32
Break Even Point in Dollars
Fixed Costs = 120,000
Weighted Average Contribution Margin = .32
120,000 / .32 = $375,000
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Solution Summary
The sales level in dollar for each division is examined.
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Determine the sales level in dollars for each division at the break even point.
Sales Mix Percentage
iPad Division = 600,000 / 1,000,000 = 60%
iPod Division = 400,000 / 1,000,000 = 40% ...
Purchase this Solution
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