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Biscayne's Rent-A-Ride rents two models of automobiles: the standard and the deluxe. Information follows: Rental price per day Variable cost per day Standard $54.00 22.50
Biscayne's Rent-A-Ride rents two models of automobiles: the standard and the deluxe. Information follows: Rental price per day Variable cost per day Standard $54.00 22.50 Deluxe $62.00 27.20 Biscayne's total fixed cost is $24,500 per month. Required: 1. Determine Biscayne's new break-even point in each of the following independent scenarios: a. Product mix is 40/60. b. Sales price increases on both models by 20 percent. (Assume a product mix of 50/50.) c. Fixed costs increase by $4,600. (Assume a product mix of 50/50.) d. Variable costs increase by 30 percent. (Assume a product mix of 50/50.) Tiago makes three models of camera lens. Its product mix and contribution margin per unit follow: Lens A Lens B Lens C Percentage of Unit sales 26% 36 38 Contribution Margin per unit $33 25 38 Required: 1. Determine the weighted-average contribution margin per unit. 2. Determine the number of units of each product that Tiago must sell to break even if fixed costs are $179,000. 3. Determine how many units of each product must be sold to generate a profit of $65,000
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