Question
A firm sells one product, a recliner, for a per unit price of $600. Variable costs per unit are $350. The firm also sells a
A firm sells one product, a recliner, for a per unit price of $600. Variable costs per unit are $350.
The firm also sells a second product, a love seat, for a per unit price of $750. Variable costs per unit are $500.
Finally, the firm sells a third product, a sectional couch, for a per unit price of $1,500. Variable costs per unit are $1,000.
The firm has a sales mix of 1 recliner for every 3 love seats and for every 2 sectional couches. That is, the sales mix is 1:3:2.
The firm has total fixed costs of $500,000.
How many units sales of sectional couches are required to earn a profit of $500,000?
1. 500 units
2. 1,500 units
3. 2,000 units
4. 1000 units
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started