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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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