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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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