Question
2. On-the-Go, Inc., produces two models of traveling cases for laptop computers: the Programmer and the Executive. The bags have the following characteristics: Programmer Executive
2. On-the-Go, Inc., produces two models of traveling cases for laptop computers: the Programmer and the Executive. The bags have the following characteristics:
| Programmer | Executive | ||||
Selling price per bag | $ | 60 |
| $ | 100 |
|
Variable cost per bag | $ | 20 |
| $ | 50 |
|
Expected sales (bags) per year |
| 8,000 |
|
| 12,000 |
|
The total fixed costs per year for the company are $678,000.
Required:
a. What is the anticipated level of profits for the expected sales volumes?
b. Assuming that the product mix is the same at the break-even point, compute the break-even point. (Round your final answer up to the nearest whole unit.)
c. If the product sales mix were to change to nine Programmer-style bags for each Executive-style bag, what would be the new break-even volume for On-the-Go? (Round your final answer up to the nearest whole unit.)
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