Nation Inc. sells three products. Last month's results are as follows:
$$\begin{array} { l r r r r }
& \mathrm { P } 1 & \mathrm { P } 2 & \mathrm { P3 } \
\text { Revenues } &\$2 0 0 , 0 0 0&\$300,000 & \$ 3 0 0 , 0 0 0 \
\text { Variable costs } & 80,000 & 280,000 & 160,000
\end{array}$$
Total fixed costs are $100,000 marketing and $125,000 administrative.
Required:
(a) What was the operating profit last month?
(b) What is Nation's break-even sales volume (at the given mix)?
(c) What is Nation's margin of safety?

Question

Nation Inc. sells three products. Last month's results are as follows:
 $$\begin{array} { l r r r r } 
& \mathrm { P } 1 & \mathrm { P } 2 & \mathrm { P3 } \
\text { Revenues } &\$2 0 0 , 0 0 0&\$300,000 & \$ 3 0 0 , 0 0 0 \
\text { Variable costs } & 80,000 & 280,000 & 160,000
\end{array}$$ 
Total fixed costs are $100,000 marketing and $125,000 administrative.
Required:
(a) What was the operating profit last month?
(b) What is Nation's break-even sales volume (at the given mix)?
(c) What is Nation's margin of safety?

Quizplus · Accepted Answer

The Answer of Nation Inc. sells three products. Last month's results are as follows:
 $$\begin{array} { l r r r r } 
& \mathrm { P } 1 & \mathrm { P } 2 & \mathrm { P3 } \
\text { Revenues } &\$2 0 0 , 0 0 0&\$300,000 & \$ 3 0 0 , 0 0 0 \
\text { Variable costs } & 80,000 & 280,000 & 160,000
\end{array}$$ 
Total fixed costs are $100,000 marketing and $125,000 administrative.
Required:
(a) What was the operating profit last month?
(b) What is Nation's break-even sales volume (at the given mix)?
(c) What is Nation's margin of safety?

Nation Inc Total Fixed Costs Are $100,000 Marketing and $125,000 Administrative