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Patriot Co. manufactures and sells three products: red, white, and blue. Their unit selling prices are red $65; white, $95; and blue, $120. The per
Patriot Co. manufactures and sells three products: red, white, and blue. Their unit selling prices are red $65; white, $95; and blue, $120. The per unit variable costs to manufacture and sell these products are red, $50; white, $70; and blue, $90. Their sales mix is reflected in a ratio of 2:2:1 (red: white:blue). Annual fixed costs shared by all three products are S 160,000. 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 S7; white, by S17; and blue, by S7. However, the new material requires new equipment, which will increase annual fixed costs by $30,000 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.) Answer is complete but not entirely correct 1. Determine its break-even point in both sales units and sales dollars of each individual product. etermine the selling price per composite unit. Ratio Selling price per unit Total per composite unit 65.00 130.00 Red 95.00. White 190.00 120.00 Blue 120.00 440.00 etermine the variable costs per composite unit. Variable cost per unit Ratio Total per composite unit 1.00X 1.00X Red 1.00X White 2.00 1.00X Blue 1.00 4.00 etermine the break-even point in composite unit. Choose Numerator: Choose Denominator: Break Even Units Total fixed costs Contribution margin per unit Break even units x s 1.00X 2 composite units etermine its break-even point in units and sales dollars of each individual product. Number pe Number of composite units to Dollar sales at the Units sales at the composite break even break-even point break-even point unit Red 2 2 1X 1X White 2 2 380 Blue 240
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