Acc320 Managerial Accounting: P3-22 Marlin Company, a wholesale distributor, has been

Acc320 Managerial Accounting 
Problem 3-22 Sales Mix; Multiproduct Break-Even Analysis 
Marlin Company, a wholesale distributor, has been operating for only a few months. The company sells three products – sinks, mirrors, vanities. Budgeted sales by product and in total for the coming month are shown below: 
Sinks Mirrors Vanities Total 
Percentage of sales 48% 20% 32% 100% 
Sales 240,000 100% 100,000 10% 160,000 100% 500,000 100%
Variable expense 72,000 30% 80,000 80% 88,000 55% 240,000 48%
Contribution Margin 168,000 70% 20,000 20% 72,000 45% 260,000 52%
Fixed expenses 223,600 
Net operating income $36,400 
Fixed Expenses $223,600 $430,000 
Dollar sales to break-even CM ration 52% 

As shown by these data, net operating income is budgeted at $36,400 for the month, and break-even at $430,000.Assume that actual sales for month total $ 500,000 as planned. Actual sales by products are:Sink, $160,000; Mirror, $200,000; and vanities, $140,000 

1. Prepare a contribution format income statement for the month based on actual sales data. Present the income statement in the format shown above. 
2. Compute the Break-Even Point in sales dollars for the month, based on your actual data. 
3. Considering the fact that the company met its $500,000 sales budget for the month, the president is shocked at the results shown on your income statement in (1) above. Prepare a brief memo for the president explaining why both the operating results and the Break-Even-Point in sales dollars are different from what was budgeted.
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