Question
The Janowski Company has three product lines of belts A, B, and C with contribution margins of $5, $ 3 and $2, respectively. The president
The Janowski Company has three product lines of belts A,B, and C with contribution margins of $5, $ 3 and $2, respectively. The president foresees sales of 120,000
units in the coming period, consisting of 15,000 units of A,30,000 units of B, and75,000 units of C. The company's fixed costs for the period are $294,000.
1. | What is the company's breakeven point in units, assuming that the given sales mix is maintained? |
2. | If the sales mix is maintained, what is the total contribution margin when 120,000 units are sold? What is the operating income? |
3. | What would operating income be if 15,000 units of A, 75,000 units of B, and 30,000 units of C were sold? What is the new breakeven point in units if these relationships persist in the next period?
Requirement 1. What is the company's breakeven point in units, assuming that the given sales mix is maintained? Begin by determining the sales mix. For every 1 unit of A, units of B are sold, andunits of C are sold. |
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