Long Beach Solar Systems, Inc. sells solar water heating and solar power systems. The business...
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Accounting
Long Beach Solar Systems, Inc. sells solar water heating and solar power systems.
The business is divided into two divisions along product lines.
Variable costing income statements for the current 2021 year are presented below:
Water Heat Power Systems Total
Sales $250,000 $750,000 $1,000,000
Variable costs 165,000 330,000 495,000
Contribution margin $85,000 $ 420,000 505,000
Fixed costs 410,000
Net income $ 95,000
Required:
(a) Determine the sales mix and contribution margin ratio for each division.
(b) Calculate the companys weighted-average contribution margin ratio.
(c) Calculate the companys breakeven point in dollars.
(d) Determine the sales level, in dollars, for each division at the breakeven point.
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