Keener produces two products: regular boomerangs and premium boomerangs. Last month 1,200 units of regular and 2,400
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Question:
Keener produces two products: regular boomerangs and premium boomerangs. Last month 1,200 units of regular and 2,400 units of premium were produced and sold. Average prices and costs per unit for the month are displayed here:
Regular | Premium | |||
---|---|---|---|---|
Selling price | $22.15 | $45.30 | ||
Variable costs | 4.31 | 6.91 | ||
Product line fixed costs | 8.17 | 24.92 | ||
Corporate fixed costs | 5.62 | 5.62 | ||
Operating earnings | $4.05 | $7.85 |
Product line fixed costs can be avoided if the product line is dropped. Corporate fixed costs can be avoided only if the firm goes out of business entirely. You may want to use a spreadsheet to perform calculations.
1) What is the overall corporate breakeven in total revenue and for each product, assuming that the sales mix is the same as last months? (Round weighted average contribuition margin percentage to 2 decimal places, e.g. 15.26% and final answers to 0 decimal places, e.g. 5,125.)
2.
What is the breakeven in revenues for regular boomerangs, ignoring corporate fixed costs? |
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