Multiple$-$Product Break$-$even, Break$-$Even Sales Revenue

Cherry Blossom Products Inc. produces and sells yoga$-$training products: how$-$to DVDs and a basic equipment set $($blocks$,$ strap, and small

pillows$).$ Last year, Cherry Blossom Products sold $13,500$ DVDs and $4,500$ equipment sets. Information on the two products is as follows:

Price

Variable cost per unit

$4$

$15$

Total fixed cost is $$92,820.$

Suppose that in the coming year, the company plans to produce an extra$-$thick yoga mat for sale to health clubs. The company estimates that

$9,000$ mats can be sold at a price of $$16$ and a variable cost per unit of $$10.$ Total fixed cost must be increased by $$30,940($making total fixed

cost $$123,760).$ Assume that anticipated sales of the other products, as well as their prices and variable costs, remain the same.

Part $3$b: Contribution Margin Ratio and Part $4$: Margin of Safety

$3$b$.$ What is the overall contribution margin ratio? Use the contribution margin ratio to compute overall break$-$even sales revenue. $($Note:

Round the contribution margin ratio to the nearest whole percent; round the break$-$even sales revenue to the nearest dollar.$)$

Overall contribution margin ratio

Overall break$-$even sales revenue

Compute the margin of safety for the coming year in sales dollars.

$

$\%$

$

s$.$