Revenue mix, two products. The Goldman Company retails two products, a standard and a deluxe version of a luggage carrier. The budgeted income statement is as follows:

Standard Carrier Deluxe Carrier Total Units sold 150,000 50,000 200,000 Revenues @ $24 and $36 per unit $3,600,000 $1,800,000 $5,400,000 Variable costs @ $16.80 and $21.60 per unit 2,520,000, 1,080,000 3,600,000 Contribution margins @ $7.20 and $14.40 per unit Fixed costs Operating income

$1,080,000 $ 720,000 1,800,000 1,440,000

$ 360,000 104 CHAPTER 3 Required 1. Compute the breakeven point in units, assuming that the planned revenue mix is maintained.

2. Compute the breakeven point in units

(a) if only standard carriers are sold and (h) if only deluxe carriers are sold.

3. Suppose 200,000 units are sold, but only 20,000 are deluxe. Compute the operating income. Compute the breakeven point if these relationships persist in the next period.

Compare your answers with the original plans and the answer in requirement 1. What is the major lesson ofthis problem?