Question
Presto Company sells shirts for men and boys. The average selling price and variable cost for each product are as follows: Mens Boys Selling Price
Presto Company sells shirts for men and boys. The average selling price and variable cost for each product are as follows:
| Mens | Boys | ||
| Selling Price | $25.00 | Selling Price | $24.00 |
| Variable Cost | $15.40 | Variable Cost | $16.00 |
Fixed costs are $81,600
Required
A. What is the break even point in units for each type of shirt, assuming the sales mix is 2:1?
B. What is the operating leverage, assuming the sales mix is 3:1 in favor of men's shirts. and sales total 12,000 shirts?
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Financial Accounting Objective Questions And Explanations
Authors: Irvin N. Gleim
6th Edition
0917537718, 978-0917537714
