calculate a revised break-even point for the firm as a whole,using the weighted-average contribution margin approach.

Exhibit 2

Product Class Cost Analysis (Normal Year) Aggregate

Sales at full capacity (units) 2,000,000 Actual sales volume (units) 1,500,000 Unit sales price ($) 1.20 Total sales revenue ($) 1,800,000 Variable cost per unit ($) 0.75 Total variable cost ($) 1,125,000 Fixed costs ($) 520,000 Net profit ($) 155,000 Ratios Variable cost to sales .63 Variable income to sales 37 Utilization of capacity (%) 75.0 A 600,000 1 .67 1 ,000,000 1 .25 750,000 170,000 80,000 .75 .25 30.0 Product Lines B 400,000 1.50 600,000 0.625 250,000 275,000 75,000 .42 .58 20.0 500,000 0.40 200,000 0.25 125,000 75,000 0 .63 .37 25.0

Exhibit 1 Break-even ChartTotal Business 3000 Last Year 6 300 Qua 56\"\" E) 2500 05x9 o't'a\\ O 2000 1500 Variable Costs Thousands of Dollars 1000 500 Fixed Costs 0 400 800 1200 1600 2000 # of Units 300 600 900 1200 1500 1800 2100 2400 $ of Sales 10 20 30 40 50 60 70 80 90 100 % of Capacity Note: Sales performance in 0005; breakeven volume : 1,155,556 units, or $1,387,000 Exhibit 2 Product Class Cost Analysis (Normal Year) Product Lines Aggregate A B c Sales at full capacity (units) 2,000,000 Actual sales volume (units) 1,500,000 600,000 400,000 500,000 Unit sales price ($) 1.20 1.67 1.50 0.40 Total sales revenue (33) 1,800,000 1,000,000 600,000 200,000 Variable cost per unit (SE) 0.75 1.25 0.625 0.25 Total variable cost ($) 1,125,000 750,000 250,000 125,000 Fixed costs ($) 520,000 170,000 275,000 75,000 Net profit ($} 155,000 80,000 75,000 0 Ratios Variable cost to sales .63 .75 .42 .63 Variable income to sales 37 25 58 37 Utilization of capacity (%) 75.0 30.0 20.0 25.0