The Jenkins Company has three product lines of beer mugsA, B, and Cwith contribution margins of $4, $3,and $2,respectively. The president foresees sales of 210,000 units in the coming period, consisting of 30,000 units of A, 120,000 units of B, and 60,000 units of C. The company's fixed costs for the period are $324,000

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 210,000 units are sold? What is the operating income?

3.What would operating income be if the company sold 30,000 units of A, 60,000 units of B, and 120,000 units of C? What is the new breakeven point in units if these relationships persist in the next period?

4.Comparing the breakeven points in requirements 1 and 3, is it always better for a company to choose the sales mix that yields the lower breakeven point? Explain.

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 Product A,

4

units of Product B, and

2

units of Product C are sold.

Determine the formula used to calculate the breakeven point of the bundle when there is more than one product sold. Then, enter the amounts in the formula to calculate the breakeven point in bundles.

Fixed costs

Contribution margin per bundle

=

Breakeven point in bundles

$324,000

20

=

16,200

The breakeven point is			units of Product A,		units of Product B, and
	units of Product