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Question #2 The following is budgeted information for the Samantha Corporation: Product 1 Product 2 Annual production & sales 60,000 40,000 Projected selling price $12

Question #2

The following is budgeted information for the Samantha Corporation:

Product 1

Product 2

Annual production & sales

60,000

40,000

Projected selling price

$12

$18

Direct Production Cost Information

Materials (per unit)

$2

$4

Direct Labor (per unit)

$3

$6

Additional information:

  • Selling & administrative costs (a mixed cost) are budgeted to be $260,000 at the production and sales listed above. The variable component is $2 per unit (same for each product).
  • Manufacturing overhead costs (a mixed cost) are budgeted to be $246,000 at the production and sales listed above. The fixed component is $96,000. 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 Samantha need to sell in order to break even?

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