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Multiple-Product Analyssy Changes in Sales Mix, Sales to Earn Terget Operating Incorme Basu Company produces two types of sleds for playing in the snow: basic
Multiple-Product Analyssy Changes in Sales Mix, Sales to Earn Terget Operating Incorme 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 Total 3,000,000 2,400,000 $5,400,000 1,000,000 1,000,000 2,000,000 $2,000,000 1,400,000 3,400,000 650,000 1,428,000 51,222,000 30,000 $1,972,000 198,900 1,773,100 Basic sled Aerosled Seles Tolal variable cost Direct fixed cost Product margin Common fxced cost 778,000 Operating income The seling prices are s30 for the basic sled and 560 for the aerosled. (Round break-even packages and break-even units to the nearest whole unit.) 1. Compute the number of units of each product that must be sod for Bssu to break even. Besic units units 2. Assume that the marketing manager changes the sales mix of the two products so that the ratio is five besic sleds to three seroaleds. Compute the number of units of each product that must be sold for Basu to bresk even. Round your answers to the nearest whole number Basic Aero 3. Conceptual Connection: Re er to the origine data. Suppose that as can increase the sales o aeros eds with creased advertisng the extra edvertising wou a oost zn edditional S 195,U0 and some o the potent al purchasers o bes c s eds would sw ch to eros e s n tote, sales o acrcaleds would increase by 12,000 units, and sales of basic sleds would deorease by 5,000 nits. Would Basu be better off with this strategy? If so, give the amount of increase in income Yes v units
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