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The Alves Company retails two products, a standard and a deluxe version of a luggage carrier. The budgeted statement of comprehensive income is as
The Alves Company retails two products, a standard and a deluxe version of a luggage carrier. The budgeted statement of comprehensive income is as follows: (Click the icon to view the budgeted statement of comprehensive income.) Required 1. Compute the breakeven point in units, assuming that the planned revenue mix is maintained. 2. Compute the breakeven point in units (a) if only standard carriers are sold and (b) if only deluxe carriers are sold. 3. Suppose 200,000 units are sold, but only 20,000 of them are deluxe. Compute the operating income Compute the breakeven point if these relationships persist in the next period. Compare your answers with the original plans and the answer in requirement 1. What is the major lesson of this problem? Requirement 1. Compute the breakeven point in units, assuming that the planned sales mix is attained Begin by determining the sales mix. For every 1 deluxe unit(s) sold 3 standard units are sold Determine the formula used to calculate the breakeven point when there is more than one product sold Then, enter the amounts in the formula to calculate the breakeven point. Fixed costs 1,200,000 Contribution margin per bundle 30 The breakeven point is standard units and deluxe units. Breakeven point in bundles 40,000
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