Question

Rojin Company prepared the following budget information for the coming year:
	Product A	Product B	Product C	Total
Sales	$300,000	$200,000	$100,000	$600,000
Variable expenses	105,000	120,000	57,000	282,000
Contribution margin	$195,000	$80,000	$43,000	$318,000
Fixed expense				250,000
Operating income				$68,000
The budget assumes the sale of 15,000 units of A, 90,000 units of B, and 80,000 units of C.

When answering the following ensure you round to the nearest dollar - do not enter any pennies or decimals.:

What is the companies break even point in sales dollars given the sales mix above?:

If the budgeted sales mix is maintained, what is the operating income is 250,000 units are sold?:

Answer 1

Rojin Company
Answer 1	Product A	Product B	Product C	Total	Note
Sales	300,000.00	200,000.00	100,000.00	600,000.00	A
Units	15,000.00	90,000.00	80,000.00	185,000.00	B
Sell price	20.00	2.22	1.25		C=A/B
Variable costs	105,000.00	120,000.00	57,000.00	282,000.00	D
Variable costs per unit	7.00	1.33	0.71		E=A/D
Contribution per unit	13.00	0.89	0.54		F=C-E
Sales Mix	8.11%	48.65%	43.24%	1.00	G=B/ Sum of B
Weighted average contribution per unit	1.05	0.43	0.23	1.72	H=F*G
Fixed costs				250,000.00	I
Total Break even units				145,440.00	J=H/I
Break even units- Product wise	11,792.00	70,755.00	62,893.00	145,440.00	K=J*G
	L	See G	M=L*G
Workings for Answer 2	Total units	Sales Mix	Units sold
Product A	250,000.00	8.11%	20,270.00
Product B	250,000.00	48.65%	121,622.00
Product C	250,000.00	43.24%	108,108.00
			250,000.00
Final Answer 2	Product A	Product B	Product C	Total
Sales mix- Units sold	20,270.00	121,622.00	108,108.00	250,000.00	See M
Less: Breakeven units	11,792.00	70,755.00	62,893.00	145,440.00	See K
Margin of safety units	8,478.00	50,867.00	45,215.00	104,560.00	N=M-K
Contribution per unit	13.00	0.89	0.54		See F
Net operating income	110,214.00	45,215.00	24,303.00	179,732.00	O=F*N