XYZ Company annually sells 2000 units of product A and 8000 units of product B. Product A sells for $10 and costs $6 to manufacture. Product B sells for $8 and costs $6 to manufacture.

a) How many units of A & B must be sold for the company to breakeven? Fixed costs are $12,000.

b) How would your answer change if the sales mix was 8000 of product A and 2000 of product B?

c) What would you recommend to management about the sales mix of product A & B?