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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. Sales
Patriot Company manufactures flags in two sizes, small and large. The company has total fixed costs of $240,000 per year. Additional data follow. Sales price per unit Small $ 20 Large $ 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 each product. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Assume the new equipment is purchased. Compute the break-even point in total sales units and the number of units to sell for each product. Break-even point in units Break-even point - Small Break-even point - Large 36,000 28,800 7,200
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