CVP Analysis – EC Ltd

Hi John

EC ltd produces and sells the following two products throughout the year in a constant mix.
Product X Variable cost per $ of sales = $0.45
Product Y Variable cost per $ of sales = $0.60
Fixed costs = $1,212,000 per period

The management of EC has stated that total sales revenue will reach a maximum of $4,000,000 and is generated by the two products in the following proportions:

Product X Variable cost per $ of sales = 70%
Product Y Variable cost per $ of sales = 30%

I’m stuck on task b of the question where I need to confirm the profits at both sales mixes on a profit volume chart.

The first profit figure comes back to £808,000 and the other profit comes back to £688,000 so can you please break the calculations down so I can check how the profits were calculated.

The question is from the Kaplan book.

Thanks