Question
Fitch Ltd. produces lighting fixtures. For the upcoming period, the company has provided the following budget information for two of its product lines: Table lamps
Fitch Ltd. produces lighting fixtures. For the upcoming period, the company has provided the following budget information for two of its product lines:
Table lamps Floor lamps Total
Sales (units) 100,000 500,000 600,000
Sales $ 6,100,000 $ 52,000,000 $ 58,100,000
Variable costs 2,600,000 22,500,000 25,100,000
Contribution margin 3,500,000 29,500,000 33,000,000
Deduct: product line fixed costs 2,700,000 28,200,000 30,900,000
Product line operating profit (loss) $ 800,000 $ 1,300,000 $ 2,100,000
Assuming the sales mix remains as budgeted, how many table lamps must be part of the sales mix for Fitch to break even?
a) 53,185
b) 93,637
c) 468,185
d) 561,822
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