Mega Electronix sells television sets and DVD players.The business is divided in
ID: 2377128 • Letter: M
Question
Mega Electronix sells television sets and DVD players.The business is divided into two divisions along product lines. CVP income statements for a recent quarter's activity are presented below.TV Division DVD Division Total
Sales $763,520 $429,480 $1,193,000
Variable costs
549,734
240,509
790,243
Contribution margin
$213,786
$188,971
402,757
Fixed costs
136,552
Net income
$266,205
Determine sales mix percentage and contribution margin ratio for each division. (Round your answers to 2 decimal places, e.g. 0.27.)
Sales Mix Percentage
TV Division
DVD Division
Contribution margin ratio
TV Division
DVD Division
Calculate the company's weighted-average contribution margin ratio. (Round your answer to 3 decimal places, e.g. 0.351.)
Calculate the company's break-even point in dollars.
$
Determine the sales level in dollars for each division at the break-even point.
TV Division $
DVD Division $
Explanation / Answer
Sales Mix Percentage
TV Division% = 763,520*100/1,193,000
= 0.6400 *100
= 64.00%
DVD Division% = 429,480*100/1,193,000
= 0.3600*100
= 36.00%
contribution margin ratio% :
TV Division% = 763,520 – 549,734*100/763,520
= 0.28*100
= 28.00%
DVD Division% = (429,480 – 240,509/429480)*100
= 0.4400*100
= 44.00%
company's weighted-average contribution margin ratio% :
(0.6400*0.2800 + 0.3600*0.4400)*100
= 0.33760*100
= 33.760%
company's break-even point in dollars :
136,552/0.33760
= $404,478.68
The sales level in dollars for each division at the break-even point =
TV Division = 404,478.68*0.6400
= $258,866.36
DVD Division = 404,478.68*0.3600
= $145,612.32