Multiple$-$Product Break$-$even

Polaris Inc. manufactures two types of metal stampings for the automobile industry: door handles and trim kits. Fixed cost equals $$146,000.$ Each door handle sells for $$12$ and has variable cost of $$9$; each trim kit sells for $$8$ and has variable cost of $$5.$

Required:

$1.$ What are the contribution margin per unit and the contribution margin ratio for door handles and for trim kits? Round the ratios to three decimal places.

Door Handles Trim Kits

Contribution margin per unit $fill in the blank $1$

$fill in the blank $2$

Contribution margin ratio

fill in the blank $3$

fill in the blank $4$

$2.$ If Polaris sells $20,000$ door handles and $40,000$ trim kits, what is the operating income?

$fill in the blank $5$

$3.$ How many door handles and how many trim kits must be sold for Polaris to break even based on the sales provided in requirement $2?$

Door handles fill in the blank $6$

units

Trim kits fill in the blank $7$

units

$4.$ Conceptual Connection: Assume that Polaris has the opportunity to rearrange its plant to produce only trim kits. If this is done, fixed costs will decrease by $$35,000,$ and $70,000$ trim kits can be produced and sold. Is this a good idea?