Requirement 1. Compute the breakeven point in units, assuming that the company achieves its planned sales mix.

Begin by determining the sales mix. For every 1 deluxe unit(s) sold,

4

standard units are sold.

Part 2

Determine the formula used to calculate the breakeven point when there is more than one product sold. Then, enter the amounts in the formula to calculate the breakeven point.

Fixed costs

Contribution margin per bundle

=

Breakeven point in bundles

Part 3

$1,300,000

$40

=

32,500

Part 4

The breakeven point is

130,000

standard units and

32,500

deluxe units.

Part 5

Requirement 2. Compute the breakeven point in units (a) if only standard carriers are sold and (b) if only deluxe carriers are sold.

(a) If only standard carriers are sold, the breakeven point is

260,000

units.

Part 6

(b) If only deluxe carriers are sold, the breakeven point is

65,000

units.

Part 7

Requirement 3. Suppose 220,000 units are sold but only 22,000 of them are deluxe. Compute the operating income. Compute the breakeven point in units. Compare your answer with the answer to requirement 1. What is the major lesson of this problem?

Compute the operating income if 220,000 units are sold but only 22,000 of them are deluxe.

	Standard Carrier	Deluxe Carrier	Total
Units sold	198,000	22,000	220,000
Revenues at $20 and $37 per unit	$3,960,000	$814,000	$4,774,000
Variable costs at $15 and $17 per unit	2,970,000	374,000	3,344,000
Contribution margin	$990,000	$440,000	1,430,000
Fixed costs			1,300,000
Operating income			$130,000

Part 8

Before calculating the breakeven points, determine the new sales mix.

For every 1 deluxe carrier sold,

9

standard carriers are sold.

Part 9

Compute the breakeven point in units, assuming the new sales mix. (Round your answers up to the next whole number.)

The breakeven point is

180,000

standard units and

20,000

deluxe units.

Part 10

Compare your answer with the answer to requirement 1. What is the major lesson of this problem?

The major lesson of this problem is that changes in the sales mix change breakeven points and operating incomes. In thisexample, the budgeted and actual total sales in number of units were identical, but the proportion of the product having the higher contribution margin declined. Operating income suffered and the breakeven point rose

.

Data table

	Standard Carrier	Deluxe Carrier	Total
Units sold	176,000	44,000	220,000
Revenues at $20 and $37 per unit	$3,520,000	$1,628,000	$5,148,000
Variable costs at $15 and $17 per unit	2,640,000	748,000	3,388,000
Contribution margins at $5 and $20 per unit	$880,000	$880,000	1,760,000
Fixed costs			1,300,000
Operating income			$460,000

1.	Compute the breakeven point in units, assuming that the company achieves its planned sales mix.
2.	Compute the breakeven point in units (a) if only standard carriers are sold and (b) if only deluxe carriers are sold.
3.	Suppose 220,000 units are sold but only 22,000 of them are deluxe. Compute the operating income. Compute the breakeven point in units. Compare your answer with the answer to requirement 1. What is the major lesson of this problem?

I dont understand how to do the steps. Can someone go through step by step and explain to me. I dont understand it. I have submitted this question 3 times and some keep sending me the same answer and the step are not clear.