Cost Analysis

Jax-O-lantern Company, Inc." produces two products, tower lights and tabletop lights. Use the data in the table below to answer the questions.

Cost of finished products Tower Light Tabletop Light

Direct Material $50 $28 $22

Direct Labor $40 $22 $18

Overhead $96 Split based on direct L abor Cost

Fixed Costs 100000100000

Retail Price $149 $119

Requirements (Be sure to show all work)

Consider each of the following questions separately by using the information in the table for each question.

1. Calculate the breakeven point in units for each product.
2. The Company reduces its sales price from $149 per pair to $129 per unit. Calculate the new breakeven point in units.
3. The Company finds a new supplier for its material. Variable costs will decrease by $10 per unit. Calculate the new breakeven point in units.
4. The Company plans to advertise on social media. The advertising campaign will increase total fixed costs by $4,000 per month. Calculate the new breakeven point in units.