Question
Smith Company can produce two types of carpet cleaners, Brighter and Cleaner. Data on these two products are as follows: Brighter Cleaner Sales volume in
| Smith Company can produce two types of carpet cleaners, Brighter and Cleaner. Data on these two products are as follows: |
| Brighter | Cleaner | |||
| Sales volume in units | 720 | 1,080 | ||
| Unit sales price | $915 | $1,800 | ||
| Unit variable cost | 366 | 810 | ||
| The number of machine-hours to produce one unit of Brighter is 1 while the number of machine-hours for each unit of Cleaner is 2. Total fixed costs for the manufacture of both products are $228,000. |
| Required: | |
| 1. | Determine the breakeven point in total units for Smith Company, assuming that the sales mix (based on physical volume) remains constant. (Round "Sales mix (based on units)" and "Weighted average contribution margin/unit" to 2 decimal places. Round your final answer for "Total units to breakeven" up to the nearest whole unit.) |
| 2. | At this breakeven level, how many of each product are envisioned? Due to rounding, the total breakeven units for Requirement 2 may differ slightly than in Requirement 1. (Round "Sales mix" to 2 decimal places. Round your final answers for "Breakdown" up to the nearest whole unit.) |
| 3. | Using the Indirect approach, what is the overall breakeven point in sales dollars? Use the breakeven units computed in Requirement 1. (Do not round intermediate calculations. Round your final answer to the nearest whole dollar.) |
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