Compute the Break even point.
Rawlings Company prepared the following budget information for the coming year:
|
|
Product A
|
Product B
|
Product C
|
Total
|
|
Sales
|
$85,714
|
$1,000,000
|
$177,777
|
$1,263,491
|
|
Variable expenses
|
25,714
|
800,000
|
97,777
|
293,491
|
|
Contribution margin
|
60,000
|
$200,000
|
$80,000
|
340,000
|
|
Fixed expenses
|
|
|
255,000
|
|
Net operating income
|
|
$85,000
|
The budget assumes the sale of 20,000 units of A, 100,000 units of B, and 80,000 units of C.
Required:
a. What is the company's break-even point given the sales mix above?
b. If the budgeted sales mix is maintained, what is the total contribution margin and net operating income if 300,000 units are sold?