Use the Following Information for Items

question 88

Multiple Choice

Use the following information for items
Ed Green Corporation has two divisions; Outdoor Sports and Indoor Sports.The sales mix is 60% for Outdoor Sports and 40% for Indoor Sports.Green incurs $2,420,000 in fixed costs.The contribution margin ratio for the Outdoor Sports Division is 40%, while for the Indoor Sports Division it is 50%.
-What will sales be for the Outdoor Sports Division at the break-even point?

• A)$2,200,000
• B)$2,750,000
• C)$2,921,739
• D)$3,300,000

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Definitions:

Retail Value

The price at which a product is sold to the end consumer, typically including markups from wholesale or manufacturing costs.

Barbie Doll

A fashion doll manufactured by the American toy-company Mattel, Inc. and launched in March 1959.

Incremental Cost

The additional cost associated with producing one more unit of output, useful for decision-making on production levels.

Opportunity Cost

The evasion of possible gains from diverse options by firmly deciding on one.