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Sundial, Inc., produces two models of sunglasses: AU and NZ. The sunglasses have the following characteristics: AU NZ Selling price per unit $ 200 $
Sundial, Inc., produces two models of sunglasses: AU and NZ. The sunglasses have the following characteristics:
AU | NZ | |||||
Selling price per unit | $ | 200 | $ | 200 | ||
Variable cost per unit | $ | 50 | $ | 100 | ||
Expected units sold per year | 50,000 | 75,000 | ||||
The total fixed costs per year for the company are $840,000.
Required:
a. What is the anticipated level of profits for the expected sales volumes?
b. Assuming that the product mix is the same at the break-even point, compute the break-even point.
c. If the product sales mix were to change to four pairs of AU sunglasses for each pair of NZ sunglasses, what would be the new break-even volume for Sundial, Inc.?
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