Patriot Co, manufactures and sells three products: red, white, and blue. Their unit selling prices are red, $20, white, $35; and blue, $65. The per unit variable costs to manufacture and sell these products are red, $12: white, $22; and blue, $50. Their sales mix is reflected in a ratio of 5:4:2 (red:white:blue). Annual fixed costs shared by all three products are $250,000. One type of raw material has been used to manufacture all three products. The company has developed a new material of equal quality for less cost. The new material would reduce variable costs per unit as follows: red, by $6; white, by $12; and blue, by $10. However , the new material requires new equipment, which will increase annual fixed costs by $50,000. Required: 1. Assume if the company continues to use the old material, determine its break-even point in both sales units and sales dollars of each individual product. (Round composite units up to next whole number.) 1. Determine its break-even point in both sales units and sales dollars of each individual product. Determine the selling price per composite unit Ratio Selling price per unit Total per composite unit Red 5 White 4 Blue N Total per composite unit Determine the variable costs per composite unit. Ratio Variable cost per unit Red White Blue Determine the break-even point in composite units. Choose Numerator: Choose Denominator: Break Even Units Break even units Determine its break-even point in units and sales dollars of each individual product Number per Number of composite units to Units sales at the composite break even break-even point unit Dollar sales at the break-even point Red White Blue 2. Assume if the company uses the new material, determine its new break-even point in both sales units and sales dollars of each Individual product (Round composite units up to next whole number.) 2. Determine its break-even point in both sales units and sales dollars of each individual product. Determine the selling price per composite unit. Ratio Selling price per unit Total per composite unit Red 5 White ch 4 Blue N Determine the variable costs per composite unit Ratio Variable cost per unit Red Total per composite unit White Blue Determine the break-even point in composite units. Choose Numerator: Choose Denominator: Break Even Units Break even units Determine its ak-even point in units and sales dollars of each individual product. Number per Number of composite units to Units sales at the composite break even. break-even point unit Dollar sales at the break-even point Red White Blue
