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Fall For Pun Company sells three products. Last year's cost and revenue data for these products were the following: Product Parachutes Hang gliders Bungee jumping
Fall For Pun Company sells three products. Last year's cost and revenue data for these products were the following: Product Parachutes Hang gliders Bungee jumping harnesses Sales Revenue $750,000 $800,000 $300,000 Variable Costs $450,000 $600,000 $150,000 Average Unit Price $250.00 $1,600.00 $150.00 Fixed costs were $ 490,000, while fixed revenues were $35.000. For next year the management team is forecasting an increase in fixed cost of approximately 15%. You are required to determine: 1. the break-even point in sales dollars for the next year, assuming that the company will achieve: & the worst possible selling mix; b. the best possible selling mix; c. & selling mix equal to the historical one. 2. how many units of each product the company should sell in order to reach the level of break-even considered under 1.c. 3. the margin of safety if the break-even level is the one deriving from hypothesis 1.c and the budgeted sales mix (in units) is the following: 1,400 for parachutes, 600 for hang gliders, and 1,900 for bungee jumping harnesses
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