Question
The Lifestyle Company (TLC) is considering whether launch the following 2 new products. Product Red Product Blue Expected price and cost data for the two
The Lifestyle Company (TLC) is considering whether launch the following 2 new products.
- Product Red
- Product Blue
Expected price and cost data for the two types of products are as follows.
Red | Blue | |
Selling price | $100 | $50 |
Variable Manufacturing Cost | $8.00 | $3.00 |
Variable Non Manufacturing Cost | $3.50 | $1.50 |
Fixed cost to manufacture both products is $300,000. The expected sales mix of Red and Blue: for every 35 units that TLC sells, 5 units would be from selling Red while 30 units would be from selling Blue.
Assuming TLC operates in a way that is consistent with all the relevant Cost-Volume-Profit assumptions, the number of units of Red and Blue it needs to sell to break-even are closest to:
Group of answer choices
1,110 Red and 6,660 Blue
830 Red and 5,000 Blue
1,200 Red and 6,500 Blue
860 Red and 5,155 Blue
800 Red and 4,800 Blue
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