Selkirk Chemical Company (SCC) produces three glues that are used in commercial applications. The following information relates to the upcoming year.

	AQ36	B845	fX345	total
Contribution per Gallon	$30,00	$24.00	$20.00
Planned Sales (Gallons)	10,000	30,000	60,000	100,000
Fixed Costs				$2,000,000

a) What is the expected Income associated with this plan?

	AQ36	B845	fX345	total
Contribution per Gallon
Planned Sales (Gallons)
Fixed Costs
Total Contribution Margin
Income

b) Assuming that the product mix remains constant what is the breakeven quantity of sales (in gallon) for each product?

	AQ36	B845	fX345	total
Contribution per Gallon
Planned Sales (Gallons)
Mix
Weighted Average Contribution Margin
Fixed Costs
Breakeven Sales*

*Breakeven sales are rounded up.

c) Suppose that the SCC sales manager believes that while the product mix will remain constant total sales will be 110,000 litres. What will be the expected income at this level of sales?

	AQ36	B845	fX345	total
Contribution Margin
Mix
Planned Sales
Total Contribution Margin
Fixed Costs
Income

Analysis

The sales manager at SCC now believes that while total sales will be 110,000 liters, the product mix will change as follows.

	AQ36	B845	fX345	total
Contribution Margin	$30,00	$24.00	$20.00
Mix	12%	32%	54%

What is the expected income with this plan?

	AQ36	B845	fX345	total
Contribution Margin
Mix
Planned Sales
Total Contribution Margin
Fixed Costs
Income