TexFab manufactures two products, GT450 and GT600 that have the following sales and cost information.

 

	GT450									GT600												Total
	Amount					%					Amount						%						Amount						%
Sales	$	25,000					100					$	75,000					100						$	100,000					100.0
Variable costs		20,000					80						37,500					50							57,500					57.5
Contribution margin	$	5,000					20					$	37,500					50						$	42,500					42.5
Fixed costs																									20,000
Operating income																								$	22,500

 

Round all dollar answers up, to the nearest whole number.

 

Required:

1. What is the breakeven point in dollars if sales remain at the same sales mix reflected in the income statement presented above?

2. If the TexFab Company's sales mix becomes $50,000 of product GT450 and $50,000 of product GT600, what is the breakeven point in sales dollars? Prepare an income statement—in the format given above—for this scenario.

3. Why have the breakeven point and the amount of operating income (πB) changed?

Answer rating: 100% (QA)

Solution Break even pointFixed cost Contribution to sales ratio Given Total sales 10... View the full answer