Question
Henning Corporation produces and sells two models of hair dryers, Standard and Deluxe. The company has provided the following data relating to these two products:
Henning Corporation produces and sells two models of hair dryers, Standard and Deluxe. The company has provided the following data relating to these two products:
Standard | Deluxe | |
Selling price.............................................. | $40 | $55 |
Variable production cost.............................. | $10 | $16 |
Variable selling and administrative expense...... | $15 | $12 |
Expected monthly sales in units.................... | 600 | 1,200 |
The company's total monthly fixed expense is $13,800.
If the actual monthly sales in units were divided equally between the two models (900 Standard and 900 Deluxe) and nothing else changed, the break-even level of sales would be:
a. | lower than with the expected sales mix. | |
b. | higher than with the expected sales mix. | |
c. | the same as with the expected sales mix. | |
d. | cannot be determined with this information |
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