Al Fagira Farm produces oranges and mangoes. The annual fixed costs are $40,000. The cost driver for variable costs is pints of fruit produced. The variable cost is $1.25 per pint of mango and 1.15 per pint of orange. Mangoes sell for $1.65 per pint, Oranges for 1.40 per pint. 3 pints of oranges are produced for every pint of mangoes.

Required:

1. Compute the number of pints of mangoes and oranges produced and sold at the break-even point.

2. What would be the BEP if the relationship is changed to 1:2 and other things remain the same (Two pints of oranges to one pint of mango).

3.What would be the BEQ if the management introduces new product of lime. The expected contribution margin per unit is .5. Under the new scenario, the farm is expecting to produce 6000 pints of orange,2000 of Mango and 1200 pints of lime. The introduction of product three will increase the fixed cost of the farm by 20 percent. Other things remain the same.