Sundial, Inc., produces two models of sunglassesAU and NZ. The sunglasses have the following characteristics.

	AU			NZ
Selling price per unit	$	380		$	380
Variable cost per unit	$	200		$	160
Expected units sold per year		75,000			25,000

The total fixed costs per year for the company are $17,860,000.

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.?

Required A

Required B

Required C

What is the anticipated level of profits for the expected sales volumes?

Anticipated profit

Assuming that the product mix is the same at the break-even point, compute the break-even point.

Break-even point

units

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.?

Break-even point

units