The Ready Company retails two products: a standard and a deluxe version of a luggage carrier. The budgeted income statement for next period is as follows: (Picture Attached)

Requirement 1. Compute the breakeven point in units, assuming that the company achieves its planned sales mix.

Begin by determining the sales mix. For every 2 deluxe unit(s) sold,

standard units are sold.

Determine the formula used to calculate the breakeven point when there is more than one product sold. Then, enter the amounts in the formula to calculate the breakeven point.

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=

Breakeven point in bundles

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=

The breakeven point is

standard units and

deluxe units.

Requirement 2. Compute the breakeven point in units (a) if only standard carriers are sold and (b) if only deluxe carriers are sold.

(a) If only standard carriers are sold, the breakeven point is

units.

(b) If only deluxe carriers are sold, the breakeven point is

units.

Requirement 3. Suppose 220,000 units are sold but only 22,000 of them are deluxe. Compute the operating income. Compute the breakeven point in units. Compare your answer with the answer to requirement 1. What is the major lesson of this problem?

Compute the operating income if 220,000 units are sold but only 22,000 of them are deluxe.

	Standard Carrier	Deluxe Carrier	Total
Units sold
Revenues at $25 and $61 per unit
Variable costs at $15 and $31 per unit
Contribution margin
Fixed costs
Operating income

Before calculating the breakeven points, determine the new sales mix.

For every 1 deluxe carrier sold,

standard carriers are sold.

Compute the breakeven point in units, assuming the new sales mix. (Round your answers up to the next whole number.)

The breakeven point is

standard units and

deluxe units.

Compare your answer with the answer to requirement 1. What is the major lesson of this problem?

The major lesson of this problem is that changes in the sales mix change:

A. breakeven points and operating incomes

B. neither breakeven points nor operating incomes

C. only breakeven points

D. only operating incomes

. In this example, the budgeted and actual total sales in number of units were identical, but the proportion of the product having the

A. higher

B. lower

C. contribution margin declined.

Operating income:

A. improved

B. stayed the same

C. suffered

and the breakeven point:

fell

rose

stayed the same

.

Choose from any list or enter any number in the input fields and then continue to the next question.

Standard Carrier Deluxe Carrier Total 220,000 3,300,000$ 5,368,000 $ 8,668,000 2,728,000 4,708,000 2,640,000 ,960,000 2,205,000 $1,755,000 132,000 88,000 Units sold Revenues at $25 and $61 per unit Variable costs at $15 and $31 per unit Contribution margins at $10 and $30 per unit Fixed costs Operating income 1,980,000 1,320,000 $ Standard Carrier Deluxe Carrier Total 220,000 3,300,000$ 5,368,000 $ 8,668,000 2,728,000 4,708,000 2,640,000 ,960,000 2,205,000 $1,755,000 132,000 88,000 Units sold Revenues at $25 and $61 per unit Variable costs at $15 and $31 per unit Contribution margins at $10 and $30 per unit Fixed costs Operating income 1,980,000 1,320,000 $