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The Wharton Company retails two products, a standard and a deluxe version of a luggage carrier. The budgeted income statement is as follows: (Click
The Wharton Company retails two products, a standard and a deluxe version of a luggage carrier. The budgeted income statement is as follows: (Click the icon to view the budgeted income statement.) Requirements 1. Compute the breakeven point in units, assuming that the planned revenue mix is maintained. 2. Compute the breakeven point in units (a) if only standard carriers are sold and (b) if only deluxe carriers are sold. 3. Suppose 240,000 units are sold, but only 40,000 of them are deluxe. Compute the operating income. Compute the breakeven point if these relationships persist in the next period. Compare your answers with the original plans and the answer in requirement 1. What is the major lesson of this problem? Requirement 1. Compute the breakeven point in units, assuming that the planned sales mix is attained. Begin by determining the sales mix. For every 1 deluxe unit(s) sold standard units are sold.
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