SKYZ Company produces two models of basketball hoops, Ausom Garage Mount and Delux Ground Mount. Presented is sales information for the year 2017.

Required

a. Determine the current break-even point in sales dollars.

b. With the current product mix and break-even point, determine the average unit contribution margin and unit sales.

c. Sales representatives believe that the total sales will increase to 3,000 units, with the sales mix likely shifting to 80 percent Ausom Garage Mount and 20 percent Delux Ground Mount over the next few years. Evaluate the desirability of this projection.

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Ausom Delux Total Units manufactured and sold. 1,000 1,500 2,500 Sales revenue.. $300,000 $700,000 $1,000,000 Variable costs.. (200,000) (420,000) (620,000) Contribution margin. $100,000 $280,000 380,000 Fixed costs.... (252,510) Before-tax profit. 127,490 Income taxes (40 percent). (50,996) After-tax profit $ 76,494