8. Bower Inc manufactures dark chocolate and milk chocolate. Sales of its dark chocolate represent 25%
of the company's total revenue. Sales of milk chocolate represent the remaining 75%. dark
chocolate has a contribution margin ratio of 80%, whereas the contribution margin ratio of milk
chocolate is only 60%. Bower Inc's monthly fixed costs average is $609,500.
1 What is the company's monthly break-even point expressed in sales dollars? Show all your workings(4 p)
2 What monthly sales level must be achieved for Bower Inc to earn a monthly operating income of
$350,000? Show all your workings(4 p)
3 If Bower Inc generates $1,400,000 in monthly sales, it will earn a monthly operating income of Show all
your workings (4 p)
4 Assume Bower Inc's margin of safety was $300,000 in May. What was the company's operating income in
May? Show all your workings (4 p)