A firm sells two different products, A and B. For each unit of B, the firm sells
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Question:
A firm sells two different products, A and B. For each unit of B, the firm sells two units of A. Selling prices and cost information per unit for both products are as follows
Selling Variable
Product. Price. Costs
A $36 $20
B 24 14
Fixed costs for the upcoming period are expected to be $651,000.
Required:
a, calculate the contribution margin per composite unit.
b, calculate the break-even point in units of each product.
c, if a net income before taxes of $239,400 is desired, how many units of A and B should be sold?
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