Question #7:

The Trojan Company sells a product for $120 per unit. The variable cost is $40 per unit,

and fixed costs are $270,000. Determine the

(a) break-even point in sales units, and

(b) break-even points in sales units if the company desires a target profit of $36,000.

Question #8:

Active Kids manufactures Childrens bicycles. It has fixed costs of $5,360,000. Active Kids sales mix and contribution margin per unit are shown as follows:

Sales Mix Contribution Margin

Basic 20% $120

Cruiser 55% $ 60

Trail 25% $ 40

Instructions

Compute the number of each type of bicycle that the company would need to sell in order to break even under this product mix.