E6-10 Mega Electronix sells television sets and DVD players. The business is divided into two divisions

E6-10

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                                             $600,000                              $400,000                  $1,000,000

Variable costs                                  450,000                               240,000                       690,000

Contribution margin                         $150,000                              $160,000                      310,000

Fixed costs                                                                                                                   124,000

Net income                                                                                                                 $ 186,000

Instructions:

(a)  Determine sales mix percentage and contribution margin ratio for each division.

(b)  Calculate the company’s weighted-average contribution margin ratio.

(c)  Calculate the company’s break-even point in dollars.

(d)  Determine the sales level in dollars for each division at the break-even point.