Switzer Company produces and sells yoga training products: instructional DVDs and basic equipment (blocks, straps, and small pillows). Last year, Switzer sold 10,000 DVDs and 5,000 sets. The information about the two products is as follows:

	DVD	equipment sets
Precio	$12	$15
Variable cost per unit	4	6

Total fixed costs are $70,000.

Suppose that next year, Switzer plans to produce an extra-thick yoga mat to sell to gyms. The company estimates that 20,000 rugs can be sold at a price of $18 and a variable cost per unit of $13. Fixed costs must increase by $48,350 (making total fixed costs of $118,350). Assume that the anticipated sales of the other products, as well as their variable prices and costs, remain the same.

Required:

1. What is the sales mix of yoga DVDs, equipment, and mats?
2:1:4

2. Calculate the equilibrium quantity of each product.

balance dvd
Balancing Equipment Sets
balance yoga mats

3. Prepare an income statement for Switzerland for the coming year.

swiss company
Statement of income
For next year
Sales
Costo variable total
Contribution margin
total fixed cost
operating income

What is the overall contribution margin ratio? Does total sales revenue break even? (Round contribution margin ratio to the nearest whole percentage; round break-even sales revenue to the nearest dollar.)

Global contribution margin ratio		%
Breakeven Total Sales Revenue	ps

4. Calculate the margin of safety for the coming year in sales dollars.
$

Answer rating: 100% (QA)

1 Sales Mix The sales mix refers to the proportion of each product sold Given Switzer sold 10000 DVDs and 5000 equipment sets last year The company pl... View the full answer