Milesaway Corporation Cost-Volume-Profit Analysis with Multiple Products Milesaway Corporation produces and sells three designs of all-weather vehicle tires: Radial, All Terrain, and Super Pro. The following represents the sales and cost information budgeted for 2017: Selling price per unit Manufacturing costs per Radial All Terrain Super Pro $50 $100 $200 unit: Direct materials $25 $50 $70 Direct Labour 15 15 15 Variable overhead 10 10 10 Fixed overhead** 5 5 5 55 80 100 Gross Margin per unit $ (5) $ 20 $ 100 **Fixed overhead per unit is based on the 2016 (actual) sales of 5,000 Radial tires, 20,000 All Terrain tires and 10,000 Super Pro tires. Fixed administrative costs total $150,000 in the 2017 budget. Required: 1. Assuming that the 2016 sales mix continues in 2017, what is the break-even volume of Radial tires? a) Milesaway cannot break even b) 6,500 units c) 351 units d) 7,338 units e) 1,049 units 2. In the previous question we assumed that the 2016 sale mix would continue in 2017. Now we want to consider what the impact would be if the total sales volume stayed the same in 2017 as it was in 2016 but the sales mix changed. Would the change in sales mix affect the company's profit? Would it affect the break-even volume? More specifically, suppose a poor economy resulted in relatively more of the Radial tires and fewer of the Super Pro tires being sold: Would the company's profit be increased, or would it be decreased? Would its break-even point be increased, or would it be decreased? Explain your conclusions.