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The Nowak Company has three product lines of belts-A, B, and C-with contribution margins of $3, $2, and $1, respectively. The president foresees sales
The Nowak Company has three product lines of belts-A, B, and C-with contribution margins of $3, $2, and $1, respectively. The president foresees sales of 320,000 units in the coming period, consisting of 32,000 units of A, 160,000 units of B, and 128,000 units of C. The company's fixed costs for the period are $272,000. Read the requirements. Contribution margin Fixed costs Operating income D 96,000 320,000 D 128,000 544,000 272,000 272,000 Requirement 3. What would operating income be if 32,000 units of A, 128,000 units of B, and 160,000 units of C were sold? What is the new breakeven point in units if these relationships persist in the next period? Begin by completing the table below to calculate operating income. Units sold Contribution margin Fixed costs A B C Total 32,000 96,000 $ 128,000 256,000 $ 160,000 320,000 160,000 512,000 272,000 240,000 Operating income Now determine the new sales mix. For every 1 unit of A, 4 units of B are sold, and 5 units of C are sold. Now calculate the breakeven point in bundles for this requirement, then determine the breakeven point for each product line. (Round to the nearest whole number.) The breakeven point is bundles.
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