Florida Favorites Company produces toy alligators and toy dolphins. Fixed costs are $1,290,000 per year.

Sales revenue and variable costs per unit are as follows:

Alligators Dolphins

Sales price $20 $25

Variables $ 8 $ 10

a. Suppose the company currently sells 140,000 alligators per year and 60,000 dolphins per year. Assuming the sales mix stays constant, how many alligators and dolphins must the company sell to breakeven per year?

b. Suppose the company currently sells 60,000 alligators per year and 140,000 dolphins per year. Assuming the sales mix stays constant, how many alligators and dolphins must the company sell to breakeven per year?

c. Explain why the total number of toys needed to breakeven in (a) is the same or different from the number in (b).

d. State four (4) assumptions of CVP analysis.