(Multiproduct) Whee-Go makes three types of scooters. The company’s total fixed costs are $1,080,000,000. Selling prices, variable costs, and sales per¬ centages for each type of scooter follow.

a. What is Whee-Go’s break-even point in units and sales dollars?

b. If the company has an after-tax income goal of $1 billion and the tax rate is 50 percent, how many units of each type of scooter must be sold for the goal to be reached at the current sales mix?

c. Assume the sales mix shifts to 50 percent Mod, 40 percent Rad, and 10 percent X-treme. How does this change affect your answer to part (b)?

d. If Whee-Go sold more X-treme scooters and fewer Mod scooters, how would your answers to parts

(a) and

(b) change? No calculations are needed.

Transcribed Image Text:

Percent of Selling Price Variable Cost Total Sales Mod $2,200 $1,900 30% Rad 3,700 3,000 50 X-treme 6,000 5,000 20