Fidelity Multimedia sells audio and video equipment and car stereo products. After performing a study of fixed and variable costs in the prior year, the company prepared a product-line profit statement as follows:

Required
a. Calculate the contribution margin ratios for the audio, video, and car product lines.
b. What would be the effect on profit of a $125,000 increase in sales of audio equipment compared with a $125,000 increase in sales of video equipment or a $125,000 increase in sales of car equipment? Based on this limited information, which product line would you recommend expanding?
c. Calculate the break-even level of sales dollars for the company as a whole. (Round to the nearest dollar.)
d. Calculate sales needed to achieve a profit of $1,800,000, assuming the current mix. (Round to the nearest dollar.)
e. Determine the sales of audio, video, and car products in the total sales amount calculated for part d. (Round to the nearestdollar.)

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Fidelity Multimedia Profitability Analysis For the Year Ended December 31,2010 Audio Video Car Total Sales Less variable costs 3,200,000 $1,920,000 1,280,000 $6,400,000 Cost of merchandise 1,900,000 180,000 Salary, part-time staff Total variable costs Contribution margirn Less direct fixed costs: 1,360,000 100,000 1,460,000 460,000 610,000 55,600 665,600 614,400 3,870,000 335,600 4,205,600 2,194,400 2,080,000 1,120,000 325,000240,000220,00010 Salary, full-time staff Total Less common fixed costs: $ 795.000 220,000 394,400 1,409.400 Advertising Utilities Other administrative costs 115,000 25,000 Total common fixed costs Profit 710,000 699400