Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The Johnston Company has three product ines of beer mugs-A, B, and C-with contribution margins of $5, $4, and S3, respectively The president faresees sales
The Johnston Company has three product ines of beer mugs-A, B, and C-with contribution margins of $5, $4, and S3, respectively The president faresees sales of 238,000 units in the coming period, consisting of 34,000 unis of A, 136,000 is of B, and 68,000 units of C. The company's fixed costs for the perlod are $432,000 Read the requirements Requirement1. What is the company's breakeven point in units, assuming that the given sales mi is maintained? Begin by determining the sales mix For every 1 unit of Product A, units of Product B, and units of Product C are sold. Requirements 1. 2. 3. What is the company's breakeven point in units, assuming that the given sales mix is maintained? If the sales mlx is maintained, whet is the total contribution margin when 236,000 units are sold? What is the oparating income? What would operating income be If the company sold 34,000 units of A, 68,000 units of B, and 136,000 units of C? What is the new breakeven point in unils if these relalionships 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 PrintDone
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started