Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Patriot Co. manufactures and sells three products: red, white, and blue. Their unit selling prices are red, $54 white, $84; and blue $109 The per
Patriot Co. manufactures and sells three products: red, white, and blue. Their unit selling prices are red, $54 white, $84; and blue $109 The per unit vanable costs to manufacture and sell these products are red, $39, white, $59, and blue, $79 Their sales mix is reflected in a ratio of 4.5.2 (red white blue). Annual fixed costs shared by all three products are $149,000. 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 nevw material would reduce variable costs per unit as follows red, by $11, white, by $21, and blue, by $11. However, the new material requires new equipment, which will increase annual fixed costs by $19,000 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 the selling price per composite unit. Ratio Selling price per unt Total per composite un Red White Blue e the variable costs per unit Ratio Variable cost per unit Total per composite unit Red
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started