Unit sold: Standard Carrier: 132,000 Deluxe Carrier: 88,000 Total: 220,000

Revenue at $25 and $61 per unit $3,300,000 $5,368,000 $8,687,000

Variable costs at $15 and $31 per unit 1,980,000 2,728,000 4,708,000

Contribution margins at $10 and $30 per unit $1,320,000 $2,640,000 $3,960,000

Fixes Costs $2,205,000

Operating Income $1,755,000

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:

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 units sold: ? stand units are sold.

This is the formula used to calculate the breakeven point when there is more than one product sold. Enter the amounts in the formula to calculate the breakeven point.

Fixes cost / Contribution margin per bundle = Breakeven point in bundles

$ ? / $ ? = $ ?

The breakeven point is: ? standard unit 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.

.