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Rhinefold brews reduced calorie beer and regular beer. Sales of its reduced calorie beer represent...

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Accounting

Rhinefold brews reduced calorie beer and regular beer. Sales of its reduced calorie beer represent 25% of the companys total revenue. Sales of regular beer represent the remaining 75%. Reduced calorie beer has a contribution margin ratio of 80%, whereas the contribution margin ratio of regular beer is only 60%. Rhinefolds monthly fixed costs average $609,500.

1. What is the companys monthly break-even point expressed in sales dollars? $__________

2. What monthly sales level must be achieved for Rhinefold to earn a monthly operating income of $350,000? $__________

3. If Rhinefold generates $1,400,000 in monthly sales, it will earn a monthly operating income of $__________.

4. Assume Rhinefolds margin of safety was $300,000 in May. What was the companys operating income in May? $__________.

5. If Rhinefolds monthly fixed costs increase by $8,500, what level of monthly sales revenue will be required to break-even? $__________.

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