Enron

CASE # 11

Your company produces and sells two products (M & Z). During the most recent month, Product M's sales

were $30,000 and its variable expenses were $15,000. Product Z's sales were $20,000 and its variable

expenses were $8,000. The company's fixed expenses were $36,450.

Required:

a. Determine the break-even point for the company.

b. If the sales mix shifts toward Product M with no change in total sales, what will happen to the break-even

point for the company? Explain