The J&J Company has three product lines of bells-A, B, and C-having contribution margin s of $3.

Question:

The J&J Company has three product lines of bells-A, B, and C-having s of $3. $2, and $1, respectively. The president foresees sales up to 200,000 units in the coming period, consisting of 20,000 units of A, 100,000 units of B, and 80.000 units of C. The company's fixed costs for the period are $255,000.
(a) What is the company's break-even point in units, assuming that the given sales mix is maintained?
(b) If the mix is maintained, what is the total when 200,000 units are sold?
(c) What is the operating income? What would the operating income become if 20,000 units of A, 80,000 units of B, and 100,000 units of C were sold? What is the new break-even point in units if these relationships persist in the next period?
Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...