Question #1

The following is budgeted information for the Christopher Corporation:

	Product 1	Product 2
Annual production & sales	50,000	75,000
Projected selling price	$40	$30
Direct Production Cost Information
Materials (per unit)	$12	$8
Direct Labor (per unit)	$6	$5

Additional information:

• Selling & administrative costs (a mixed cost) are budgeted to be $600,000 at the production and sales listed above. The variable component is $3 per unit (same for each product).
• Manufacturing overhead costs (a mixed cost) are budgeted to be $800,000 at the production and sales listed above. The fixed component is $300,000. Each product uses the same amount of variable manufacturing overhead per unit.

Assuming the budgeted sales mix remains intact, how many units of each product does Christopher need to sell in order to earn a target operating income of $240,000?