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A toy company has three product lines of stuffed animalslion, rabbit, and giraffehaving marginal contribution (=price variable cost) of $3, $2, $1, respectively. The forecast
A toy company has three product lines of stuffed animalslion, rabbit, and giraffehaving marginal contribution (=price variable cost) of $3, $2, $1, respectively. The forecast estimated sales up to 200,000 stuffed animals in the next year, consisting demands of 20,000 lions, 100,000 rabbits, and 80,000 giraffes. The company's fix costs for the year are $255,000. a. (5 pts) What is the company's break-even volume, assuming that the given sales mix is maintained? Hint: think about which stuff animal the company would produce first. Break-even volume = fix cost/ marginal contribution
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