Problem 18-7A (Algo) Break-even analysis with two products LO P3 Patriot Company manufactures flags in two sizes, small and large. The company has total fixed costs of $261,000 per year. Additional data follow. Small Large Sales price per unit $ 25 $ 35 Variable costs per unit $ 16 $ 21 Sales mix percent 80% 20% The company is considering buying new equipment that would increase total fixed costs by $50,300 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
Patriot Company manufactures flags in two sizes, small and large. The company has total fixed costs of $261,000 per year. Additional data follow. The company is considering buying new equipment that would increase total fixed costs by $50,300 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. Compute the weighted-average contribution margin without the new equipment. The company is considering buying new equipment that would increase total fixed costs by $50,300 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. 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. The company is considering buying new equipment that would increase total fixed costs by $50,300 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. 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
