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.