Product C Product J Product R Sales Wariable expenses $330,000 $190,000 $330,000 198,000 133,000 264,000 Contribution...

 

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Product C Product J Product R Sales Wariable expenses $330,000 $190,000 $330,000 198,000 133,000 264,000 Contribution margin $132,000 $57,000 $66,000 Total $850,000 595,000 $255,000 1. Margin of safety Total budgeted (or actual) sales-Break-even sales 2. Margin of safety percentage Margin of safety in dolars 3. Degree of operating leverage Contribution margin Total budgeted (or actualisales Budgeted operating income is: Operating income $135,000 4. % change in operating income -Degree of operating leverage x % change in sales Required: a) Calculate the break-even sales in dollars for the month. (4 marks) Extra space for supporting cal 5. Multi-product break-even in total sales dollars Fixed expenses Overall Contribution Margin Ratio Break-even in sales dollars b) Calculate the degree of operating leverage (2 marks) Answer sheet New 6. Weighted average CM (at current level of sales) Total contribution margin 7. Multi-product break-even in unit sales - Total unit sales Fixed expenses Weighted average contribution margin per unit 8. Multi-product dollar sales to attain target profit after taxes Fixed expenses+[(Target after-1 Overall contribu Break-even in sales dollars b) Calculate the degree of operating leverage (2 marks) Degree of operating leverage c) If actual sales of Product J decreased and Product R increased by the same dollar amount, what would be the impact on the company break-even point? Why? (4 marks) Extra space for supporting calculations Product C Product J Product R Sales Wariable expenses $330,000 $190,000 $330,000 198,000 133,000 264,000 Contribution margin $132,000 $57,000 $66,000 Total $850,000 595,000 $255,000 1. Margin of safety Total budgeted (or actual) sales-Break-even sales 2. Margin of safety percentage Margin of safety in dolars 3. Degree of operating leverage Contribution margin Total budgeted (or actualisales Budgeted operating income is: Operating income $135,000 4. % change in operating income -Degree of operating leverage x % change in sales Required: a) Calculate the break-even sales in dollars for the month. (4 marks) Extra space for supporting cal 5. Multi-product break-even in total sales dollars Fixed expenses Overall Contribution Margin Ratio Break-even in sales dollars b) Calculate the degree of operating leverage (2 marks) Answer sheet New 6. Weighted average CM (at current level of sales) Total contribution margin 7. Multi-product break-even in unit sales - Total unit sales Fixed expenses Weighted average contribution margin per unit 8. Multi-product dollar sales to attain target profit after taxes Fixed expenses+[(Target after-1 Overall contribu Break-even in sales dollars b) Calculate the degree of operating leverage (2 marks) Degree of operating leverage c) If actual sales of Product J decreased and Product R increased by the same dollar amount, what would be the impact on the company break-even point? Why? (4 marks) Extra space for supporting calculations

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a Calculate the breakeven sales in dollars for the month Total fixed expenses 255000 Overall contr... View the full answer