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Multiple-Product Analysis, Changes in Sales Mix, Sales to Earn Target Operating Income Basu Company produces two types of sleds for playing in the snow: basic
Multiple-Product Analysis, Changes in Sales Mix, Sales to Earn Target Operating Income Basu Company produces two types of sleds for playing in the snow: basic sled and aerosled. The projected income for the coming year, segmented by product line, follows: \begin{tabular}{lrrr} & Basic Sled & Aerosled & Total \\ \hline Sales & $3,000,000 & $2,400,000 & $5,400,000 \\ Total variable cost & 1,000,000 & 1,000,000 & 2,000,000 \\ \cline { 2 - 4 } \multicolumn{1}{c}{ Contribution margin } & $2,000,000 & $1,400,000 & $3,400,000 \\ Direct fixed cost & 778,000 & 650,000 & 1,428,000 \\ \cline { 2 - 4 } Product margin & $1,222,000 & $750,000 & $1,972,000 \\ Common fixed cost & & & 198,900 \\ \cline { 2 - 4 } \multicolumn{1}{c}{ Operating income } & & & $1,773,100 \\ \hline \end{tabular} The selling prices are $30 for the basic sled and $60 for the aerosled. (Round break-even packages and break-even units to the nearest whole unit.) Required: Download Excel spreadsheet 1. Compute the number of units of each product that must be sold for Basu to break even. Basic Aero units units Basic units Aero units basic sleds would decrease by 5,000 units. Would Basu be better off with this strategy? If so, give the amount of increase in income
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