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On-the-Go, Inc., produces two models of traveling cases for laptop computers: the Programmer and the Executive. The bags have the following characteristics: Programmer Executive Selling
On-the-Go, Inc., produces two models of traveling cases for laptop computers: the Programmer and the Executive. The bags have the following characteristics: |
Programmer | Executive | |||||
Selling price per bag | $ | 60 | $ | 100 | ||
Variable cost per bag | $ | 30 | $ | 50 | ||
Expected sales (bags) per year | 8,000 | 12,000 | ||||
The total fixed costs per year for the company are $664,000. |
Required: |
(a) | What is the anticipated level of profits for the expected sales volumes? |
(b) | Assuming that the product mix is the same at the break-even point, compute the break-even point.(Round up your break-even units to the nearest whole unit.) |
(c) | If the product sales mix were to change to nine Programmer-style bags for each Executive-style bag, what would be the new break-even volume for On-the-Go? (Round up your break-even units to the nearest whole unit.) |
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