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Annual sales volume Unit selling price Variable expense per unit Gold 100,000 $2.10 $1.00 Silver 219,000 $1.90 $1.30 Copper 292,000 $1.60 $1.10 Total fixed expenses
Annual sales volume Unit selling price Variable expense per unit Gold 100,000 $2.10 $1.00 Silver 219,000 $1.90 $1.30 Copper 292,000 $1.60 $1.10 Total fixed expenses are $274,000 per year. All three products are sold in highly competitive markets, so the company is unable to raise prices without losing an unacceptable numbers of customers. The company has an extremely effective lean production system, so there are no beginning or ending work in process or finished goods inventories **TIP: To answer the questions below it will be most helpful if you prepare segmented income statements as illustrated in your textbook Required: 1. What is the company's over-all break-even point in dollar sales? 2. Of the total fixed expenses of $274,000, $31.460 could be avoided if the Gold product is dropped. $94.200 if the Silver product is dropped, and $98,000 if the Copper product is dropped. The remaining fixed expenses of $50,340 consist of common fixed expenses such as administrative salaries and rent on the factory building that could be avoided only by going out of business entirely a. What is the break-even point in unit sales for each product? b. If the company sells exactly the break-even quantity of each product, what will be the overall profit of the company
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