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Starting from January 1, 2025 Lost-As-Rock Pillow Limited will make and sell three products. The key financial information for 2025 related to these products are

Starting from January 1, 2025 Lost-As-Rock Pillow Limited will make and sell three products. The key financial information for 2025 related to these products are as follows:

Activity

Rotten Chair

Mixed Seat

Feather Pillow

Selling Price

$181.75

$121.10

$137.50

Direct Material (per unit)

$17.60

$14.40

$19.90

Direct Labour (per unit)

$12.30

$16.30

$12.50

Variable Manufacturing Overhead (per unit)

$23.80

$9.40

$14.40

Variable Selling Expense (per unit)

$23.70

$14.80

$13.30

Fixed Manufacturing Overhead (total)

$28,900,000

$56,500,000

$66,400,000

Fixed Administrative Overhead (total)

$15,100,000

$42,500,000

$18,500,000

Fixed Marketing (total)

$44,300,000

$11,600,000

$30,100,000

The company projects a sales mix of 30:40:30. In 2025 the company plans on producing and selling 18,000,000 units.

Required:

  1. Compute the breakeven quantity in 2025 for the sales mix and the quantity of overall units the company plans to produce and sell. [2 Marks]
  2. Compute the breakeven revenue in 2025 for the sales mix and the quantity of overall units the company plans to produce and sell. [2 Marks]
  3. Compute the breakeven quantity in 2025 for the sales mix and the quantity of overall units the company plans to produce and sell if desire a target net income of $26,000,000. [2 Marks]
  4. Compute the breakeven revenue in 2025 for the sales mix and the quantity of overall units the company plans to produce and sell if desire a target net income of $18,000,000. [2 Marks]

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