Switzer Company produces and sells two types of yoga-training products: how-to videotapes and a basic equipment set (blocks, strap, and small pillows). Last year, Switzer sold 10,000 videos and 5,000 equipment sets. Information on the two products is as follows:
| Equipment |
Video |
Set |
|
Price
|
$12.00
|
$15.00
|
|
Variable cost per unit
|
4.00
|
6.00
|
Total fixed costs are $70,000.
Required
1. What is the sales mix of videos and equipment sets?
2. Compute the break-even quantity of each product.
3. Prepare an income statement for Switzer for last year. What is the overall contribution margin ratio? The overall break-even sales revenue?