IT Equip sells IT equipment, specialising in printers and projectors. The following statement reflects the contribution margin

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IT Equip sells IT equipment, specialising in printers and projectors. The following statement reflects the contribution margin of each activity and overall profit levels.

Required
(a) Calculate the contribution margin ratios for each of the two areas of activity and in total.
(b) Using the total contribution margin ratio, calculate the level of sales required of each product to break even.

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Accounting Business Reporting For Decision Making

ISBN: 9780730369325

7th Edition

Authors: Jacqueline Birt, Keryn Chalmers, Suzanne Maloney, Albie Brooks, Judy Oliver, David Bond

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Question Posted: Dec 22, 2022 10:21 AM

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IT Equip sells IT equipment, specialising in printers and projectors. The following statement reflects the contribution margin

Question:

Sales Less: Variable costs Contribution margin Direct fixed costs Common fixed costs: Utilities Other administration Profit Printers $1548 000 1 130 000 418 000 207 500 Projectors $797 500 532 500 265 000 177 500 Total $2345 500 1662 500 683 000 385 000 20000 81000 $ 197 000

Step by Step Answer:

a b Breakeven sales 486000 29 1675862 For printers 1675862 x 66 1106069 For projectors ...View the full answer

Accounting Business Reporting For Decision Making

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