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Patriot Company manufactures flags in two sizes, small and large. The company has total fixed costs of $240,000 per year. Additional data follow. Small Large

Patriot Company manufactures flags in two sizes, small and large. The company has total fixed costs of $240,000 per year. Additional data follow.

Small Large
Sales price per unit $ 20 $ 30
Variable costs per unit $ 13 $ 18
Sales mix percent 80% 20%

The company is considering buying new equipment that would increase total fixed costs by $48,000 per year and reduce the variable costs of each type of flag by $1 per unit. Required: 1. Compute the weighted-average contribution margin without the new equipment. 2. Assume the new equipment is not purchased. Determine the break-even point in total sales units and the break-even point in units for each product. 3. Assume the new equipment is purchased. Compute the break-even point in total sales units and the number of units to sell for eachproduct.

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