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Generic Company sells two types of blenders: standard and deluxe. Data on the two blenders...

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Accounting

Generic Company sells two types of blenders: standard and deluxe. Data on the two blenders is given below.

Standard per Unit

Standard at 52,000 units

Deluxe per unit

Deluxe at 35,000 units

Total

Ratio

Sales

$80

$4,160,000

$400

$14,000,000

$18,160,000

100.00%

Variable expenses

60

3,120,000

280

9,800,000

12,920,000

71.1%

Contribution margin

$20

$1,040,000

$120

$4,200,000

$5,240,000

28.9%

Total Fixed expenses

5,500,000

Net operating income (loss)

($260,000)

Required: Show your work.

a. Calculate the overall contribution margin ratio for the company. Round percentages to one decimal place.

b. What is the company's overall break-even point in dollar sales? Round up to the nearest whole dollar.

c. If the company increases the price on the Standard product to $100 per unit with no change in the per unit variable expenses. However, the sales volume decreases to 40,000 units. What happens to the company's overall Net Operating Income?

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