S&P Supply sells only two products, Product S and Product P. Product S sells for $25 per unit, and Product P sells for $50 per unit. Variable production cost is $20 per unit for both products during the month. Variable marketing cost is $10 per unit for product P during the month. S&P Supply has incurred a total fixed costs of $225,000 during the month.

a) What is the firms breakeven sales in dollars, assuming a sales (revenue) mix of 20% Product S and 80% Product P?

b) Suppose the firm generated the amount of sales in dollars needed to break even, assuming a sales mix of 20% Product S and 80% Product P. With the same amount of sales in dollars, if the firms actual sales mix was 30% Product S and 70% Product P, total profits would be: (justify your answer)

CHOOSE ONE: POSITIVE NEGATIVE ZERO

c) If the firms actual profits were $90,000 with a revenue mix of 20% Product S and 80% Product P, what was total revenue from Product P?

d) Suppose you were hired as a consultant by S&P Supply and you were asked to give a recommendation on the revenue mix. What revenue mix would you recommend? If you would like to have more information to help you make the recommendation, what other information would you like to obtain? Where would you get that information from and how would you use the information in your analysis?