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Patriot Company manufactures flags in two sizes, small and large. The company has total fixed costs of $275,000 per year. Additional data follow. Sales price
Patriot Company manufactures flags in two sizes, small and large. The company has total fixed costs of $275,000 per year. Additional data follow. Sales price per unit Variable costs per unit Sales mix percent Small $ 22 $ 13 80% Large $ 32 $ 18 20% The company is considering buying new equipment that would increase total fixed costs by $56,100 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the weighted average contribution margin without the new equipment. Weighted-average contribution margin Required 1 Required 2 >
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