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:

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

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

3.	Suppose 250,000 units are sold but only 25,000 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?

DATA TABLE

Standard Carrier Deluxe Carrier Total

Units sold 200,000 50,000 250,000

Revenues at $25 and $45 per unit $5,000,000 $2,250,000. $7,250,000

Variable costs at $15 and $25 per unit 3,000,000 1,250,000 4,250,000

Contribution margins at $10 and $20 per unit$. 2,000,000 $1,000,000 3,000,000

Fixed costs 2,475,000

Operating income $525,000

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 1 deluxe unit(s) sold, -------- standard units are sold.