Question

Malibu Corporation has monthly fixed costs of $59,000. It sells two products for which it has provided the following information. Sales Price Contribution Margin Product 1 $ 15 $ 9 Product 2 20 4 a. What total monthly sales revenue is required to break even if the relative sales mix is 30 percent for Product 1 and 70 percent for Product 2

Answer 1

$184,375

Step-by-step explanation:

The computation of the monthly sales revenue that needed to be break even is given below:

Here we assume the sales be x

0.18x + 0.14x = $59,000

0.32x = $59,000

x = $59,000 ÷ 0.32

= $184,375

The 0.18x come from

= ($9) ÷ ($15) × 0.30x

= 0.18x

And, the 0.14x come from

= ($2) ÷ ($20) × 0.70x

= 0.14x