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P2. (CVP for multiple products case) Rowling Company produces and sells three products, product A, product B, and product C. Over the most recent
P2. (CVP for multiple products case) Rowling Company produces and sells three products, product A, product B, and product C. Over the most recent five years, Rowling sold, on average, 10,000 units of A, 30,000 units of B, and 60,000 units of C, annually. The following information pertains to the prices and costs of the three products. A B C Price($)/unit 20 40 30 Variable costs ($)/unit -14 -24 -15 Contribution margin/unit 6 16 15 Fixed costs: $144,000 Target income $28,800 Required: Assume that the sales mix is maintained. a. What is the company's break-even point in terms of the number of units of each product and $? b. How many units of each product should be sold to earn the target income?
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