Question
Sheridan Industries sells two electrical components with the following characteristics. Fixed costs for the company are $306,000per year. XL-709 CD-918 Sales price$27.00 $42.00 Variable cost
Sheridan Industries sells two electrical components with the following characteristics. Fixed costs for the company are $306,000per year.
XL-709
CD-918
Sales price$27.00 $42.00 Variable cost 23.00 34.00 Sales volume 61,200units 91,800units
How many units of each product must Sheridan Industries sell in order to break even?
Sheridan's vice president of sales has determined that due to market changes, the sales price of component XL-709 can be increased to $31.00with no impact on sales volume. What will be Sheridan's new breakeven point in units?
Returning to the original information, Sheridan's vice president of marketing believes that spending $91,800on a new advertising campaign will increase sales of component CD-918 to122,400units, without affecting the sales of product XL-709. How many units of each product must Sheridan sell to break even under this new scenario?
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Management Accounting Information for creating and managing value
Authors: Kim Langfield Smith, David Smith, Paul Andon, Ronald Hilton, Helen Thorne
8th edition
9781760420413 , 978-1760420406
