product x: revenue $15.00 variable cost $2.50 product y: revenue $25.00 variable cost $10.00 total fixed costs $50,000 what is the operating income, assuming actual sales total 150,000 units, and the sales mix is two units of product x and one unit of product y?

Respuesta :

Operating income is $1,950,000 if actual sales total 150,000 units, and the sales mix is two units of product x and one unit of product y.

Since the sales mix is 2 to 1 for X and Y respectively, product X has 2/3 of the sales and product Y has 1/3 of the sales.

              Product X     Product Y           Total

Sales units 100,000      50,000            150,000      

Revenue   $1,500,000   $1,250,000     $2,750,000

Var. costs   $250,000      $500,000          $750,000

Fixed costs= $50,000

Operating income = Revenue-Fixed costs-Var. costs

Operating income = $2,750,000- $50,000 - $750,000

Operating income = $1,950,000

When a firm manufactures more than one product, its percentage of sales is used to determine units sold based on the sales mix of each product.

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