1. A company sells two products, X and Y. The sales mix consists of a package of two units of X and five units of Y (i.e., sales mix is 2:5). Total fixed costs are $49,500. The unit contribution margins for X and Y are $2.50 and $1.20, respectively.

Considering the company as a whole, the number of packages to break even is

a. 31,500

b. 4,500

c. 8,250

d. 9,900

2. All else being the same, a company will accept a special order when the additional revenue from the order exceeds

a. the costs of materials and labor used in producing the order.

b. the variable costs needed to deliver the order.

c. the indirect variable costs used in producing the order.

d. all of the above.

3. Kent Co.s operating percentages (i.e., operating items as a percent of sales dollars) were as follows:

Sales 100%

Cost of sales

Variable 50%

Fixed 10% 60%

Gross Margin 40%

Other operating expenses

Variable 20%

Fixed 15% 35%

Operating income 5%

Kents sales totaled $2,000,000. At what sales level would Kent break even?

a. $1,900,000

b. $1,666,667

c. $1,250,000

d. $833,333