Question
1. Montgomery Corp sells two products. Product A sells for $200 per unit, and has unit variable costs of $150. Product B sells for $50
1. Montgomery Corp sells two products. Product A sells for $200 per unit, and has unit variable costs of $150. Product B sells for $50 per unit, and has unit variable costs of $20. Currently, Montgomery sells three unity of product B for every two units of product A sold. Montgomery has fixed costs of $760,000. What is Montgomery's break-even point in units?
| a. | 20,000 units of A and 20,000 units of B | |
| b. | 12,000 units of A and 8,000 units of B | |
| c. | 8,000 units of A and 12,000 units of B | |
| d. | 10,000 units of A and 10,000 units of B |
2. Montgomery Corp sells two products. Product A sells for $200 per unit, and has unit variable costs of $150. Product B sells for $50 per unit, and has unit variable costs of $20. Currently, Montgomery sells three units of product B for every two units of product A sold. Montgomery has fixed costs of $760,000. How many units would Montgomery have to sell to earn a profit of $57,000?
| a. | 21,500 units of A and 21,500 of B | |
| b. | 12,900 units of A and 8,600 units of B | |
| c. | 8,600 units of A and 12,900 units of B | |
| d. | 10,750 units of A and 10,750 units of B
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