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Break-Even Point in Units for a Multiple-Product Firm Suppose that Chillmax Company now sells both pairs of shoes and fabric carryalls. The pairs of shoes
Break-Even Point in Units for a Multiple-Product Firm Suppose that Chillmax Company now sells both pairs of shoes and fabric carryalls. The pairs of shoes are priced at $60 and have variable costs of $21 each. The carryalls are priced at $36 and have variable costs of $9 each. Total fixed cost for Chillmax as a whole equals $91,500 (includes all fixed factory overhead and fixed selling and administrative expense). Next year, Chillmax expects to sell 3,500 pairs of shoes and 875 carryalls. Required: 1. Form a package of shoes and carryalls based on the sales mix expected for the coming year. Package Unit Unit Contribution Margin Sales Mix Unit Contribution Margin - = x = Product Shoes Carryall $ Price 60 36 $ Variable Cost 21 9 $ x 39 27 x Package total
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