[sagnik2422]

Lincoln Corporation produces and sells two produtcs : Standard and Deluxe. The info on the two products sold for the last month is given below. The common fixed cost is $15,000.
Standard : Sales : $45,000 Variable Expenses : $36,000
Deluxe : Sales : $33,000 Variable Expenses : $16,500
Suppose total sales reveue for the coming month stays the same, but the sales (revenue) mix changes such that Deluxe increases by 20% (i.e. additional 20% to current %) and Standard decreases by 20% from the present levels. What will be the impact of this change on the break even sales revenue of Lincoln?
Answer was Break Even sales will decrease by $7,115 but I don't get how , please show help with steps.


MY WORK : I was really lost and calculated profit volume ratio to be 32.69% but got no further

[paraclete]

How hard can it be?
standard contribution margin $9,000 = 20%
delux comtribution margin $16,500 = 50%
what is the breakeven point?
Pv =15000/( 78000 - 52500) = 15000/25500 =

every dollar of sales where delux replaces standard increases contribution margin by 30%

standard contribution margin = 20% i.e. variable expense = 80% therefore a change 20% on sales reduces sales $9000 and contribution margin by $1800
Delux contribution margin = 50% i.e. variable expense =50% there for a change of 20% increases sales by 6600 and contribution margin by $3300
what is the breakeven point?
Pv =15000/( 75600 - 54000) = 15000/21600 =


all you need to do is make all the calculations at least once