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Please show work. Thanks Practice Problem 3 Americana Inc, sells three different flag types they label red, white and blue. Their unit sales prices are
Please show work. Thanks Practice Problem 3 Americana Inc, sells three different flag types they label red, white and blue. Their unit sales prices are red, $20; white, $35; and blue, $65. The per unit variable costs to manufacture and sell these products are red, $12, white, $22; and blue, $50. Their sales mix is reflected in a ratio of 5:4:2 (red:white:blue). Annual fixed costs shared by all three products are $250.000. One type of raw material has been used to make all three products. The firm has developed a new material of equal quality but for less cost. The new material would reduce variable costs per unit as follows: red, by $6; white, by $12; and blue, by $10. However, the new material requires new equipment, which will increase annual fixed costs by $50,000. Required: 1. 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. 2. If the company uses the new material, determine its new break-even point in both sales units and sales dollars of each individual product
Please show work. Thanks
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