Homework Answers
Solution:
Overall CM ratio = Overall Contribution margin / Overall Sales
= ($21,000 + $34,000 - $10,050 - $16,900) / ($21,000 + $34,000)
= 51%
Break even point for the entire company = Fixed costs / Overall CM ratio = $45,960 / 51% = $90,118
Hence 3rd option is correct.
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