PROBLEM THREE

Safari USA, Inc. sells three types of stuffed animals, elephants, dogs, and bears. The following information is available:

	Elephants	Dogs	Bears	Total
Sales Volume	40,000	20,000	80,000
Selling Price	$14	$20	$30
Variable cost per unit	8	10	25
Total fixed costs				$400,000

REQUIRED (show all supporting calculations):

1. What is the breakeven point for Safari USA?
2. Would you recommend promoting the change in product mix to 1 to 4 to 2 of elephants, dogs, and bears? Why?
3. An EXECUTIVE SUMMARY IS REQUIRED.