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The Wharton Company retails two products: a standard and a deluxe version of a luggage carrier. The budgeted income statement for next period is as
The Wharton Company retails two products: a standard and a deluxe version of a luggage carrier. The budgeted income statement for next period is as follows
0 Data Table Total 180,000 6,336,000 4,320,000 Standard Carrier Deluxe Carrier Units sold 108,000 72,000 Revenues at $30 and $43 per unit 3,240,000 $ 3,096,000 $ Variable costs at $22 and $27 per unit 2,376,000 1,944,000 Contribution margins at $8 and 916 per unit $_ 864,000 $ 1,152,000 Fixed costs Operating income $ 2,016,000 1,400,000 616,000 Print Done 0 Requirements 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 180,000 units are sold but only 60,000 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? Print DoneStep by Step Solution
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