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Karen's Klothes sells blouses for women and girls. The average selling price and variable cost for each product are as follows: Women: Selling Price $18.00
Karen's Klothes sells blouses for women and girls. The average selling price and variable cost for each product are as follows: Women: Selling Price $18.00 Girls: Selling Price $15.00 Women: Variable Cost $12.75 Girls: Variable Cost $10.50 Fixed costs are $30,000 and cannot be separated evenly between the two products. Required: a. What is the break-even point in units for each type of blouse assuming the sales mix is 2:1 in favour of women's blouses? Total sales cannot exceed 7,000 units due to space constraints. b. What is the operating income assuming the sales mix is 2:1 in favour of women's blouses, and sales total 9,900 blouses
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