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The Jenkins Company has three product lines of beltsA, B, and C-with contribution margins of $6, $5, and $3, respectively. The president foresees sales
The Jenkins Company has three product lines of beltsA, B, and C-with contribution margins of $6, $5, and $3, respectively. The president foresees sales of 224,000 units in the coming period, consisting of 32,000 units of A, 128,000 units of B, and 64,000 units of C. The company's fixed costs for the period are $448,000. Read the requirements. Requirer Begin by Requirements 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 224,000 units are sold? What is the operating income? - 3. What would operating income be if the company sold 32,000 units of A, 64,000 units of B, and 128,000 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. d? t C are sold.
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