Question
Crane Industries sells two electrical components with the following characteristics. Fixed costs for the company are $700,000 per year. XL-709 CD-918 Sales price $17 $31
Crane Industries sells two electrical components with the following characteristics. Fixed costs for the company are $700,000 per year.
| XL-709 | CD-918 | |||
|---|---|---|---|---|
| Sales price | $17 | $31 | ||
| Variable cost | 12 | 23 | ||
| Sales volume | 86,800 units | 217,000 units |
Returning to the original information, Cranes vice president of marketing believes that spending $33,700 on a new advertising campaign will increase sales of component CD-918 to 260,400 units, without affecting the sales of product XL-709. How many units of each product must Crane sell to break even under this new scenario? (For CD and XL).
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Management and Cost Accounting
Authors: Alnoor Bhimani, Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan
6th edition
1292063467, 978-1292063461
