VSB 3006 Dr. JME

Handout - Breakeven

#1 #2 #3

Selling Price of A 10 15 6

Selling Price of B 8 22 5

Variable Cost of A 4 11 4

Variable Cost of B 7 19 4

Mix of A and B 5-2 3-5 2-1

Fixed Costs 1,700 2,000 1,000

Tax Rate 25% 30% 30%

Desired NI 10,000 45,000 28,000

Required: Determine the number of As and Bs each of the firms should sell to meet their individual goals.