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Problem 2 Kat's Kittie Carrier Inc. retails two products: a standard and a deluxe version of a cat carrier. The budgeted income statement for the
Problem 2 Kat's Kittie Carrier Inc. retails two products: a standard and a deluxe version of a cat carrier. The budgeted income statement for the next period follows: Standard Deluxe Total Units sold 187,500 62,500 250,000 Revenues $5,250,000 $3,125,000 $8,375,000 Variable costs 3,375,000 1,875,000 5,250,000 Contribution margin $ 1.875,000 $ 1.250.000 $3,125,000 Fixed costs 2.250,000 Operating income $ 875.000 a. Compute the breakeven point in units, presuming that the company achieves its planned sales mix. b. Compute the breakeven point in units (1) if only standard carriers are sold, and (2) if only deluxe carriers are sold. C. Suppose 250,000 units are sold but only 50,000 are deluxe. Compute the operating income. Compute the breakeven point in units. Compare your answer to (a). What is the major lesson of this
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