Question
Changes in Sales Mix. Hi-Tech Incorporated produces two different products with the following monthly data (these data are the same as the previous exercise). Cell
Changes in Sales Mix. Hi-Tech Incorporated produces two different products with the following monthly data (these data are the same as the previous exercise).
Cell | GPS | Total | |
Selling price per unit | $100 | $400 | |
Variable cost per unit | $ 40 | $240 | |
Expected unit sales | 21,000 | 9,000 | 30,000 |
Sales mix | 70 percent | 30 percent | 100 percent |
Fixed costs | $1,800,000 |
Required:
If the sales mix shifts to 50 percent Cell and 50 percent GPS, would the break-even point in units increase or decrease? Explain. (Detailed calculations are not necessary but may be helpful in confirming your answer.)
Go back to the original projected sales mix. If the sales mix shifts to 80 percent Cell and 20 percent GPS, would the break-even point in units increase or decrease? Explain. (Detailed calculations are not necessary but may be helpful in confirming your answer.)
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