Question

Requirement 3. Suppose 250 comma 000 units are sold but only 50 comma 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 250 comma 000 units are sold but only 50 comma 000 of them are deluxe. Standard Carrier Deluxe Carrier Total Units sold 200,000 50,000 250,000 Revenues at $28 and $50 per unit $5,600,000 $2,500,000 $8,100,000 Variable costs at $18 and $30 per unit 3,600,000 1,500,000 5,100,000 Contribution margin $2,000,000 $1,000,000 3,000,000 Fixed costs 2,250,000 Operating income $750,000 Before calculating the breakeven​ points, determine the new sales mix. For every 1 deluxe carrier sold, 4 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 4 standard units and 1 deluxe units.

Answer 1

Break even point 187,500 mix units

deluxe 37,500 units

standard 150,000 units

Step-by-step explanation:

sales ratio

deluxe 1 units for every 4 of standard

mix 1:4

20% deluxe

80% standard

sales mix contribution margin:

standard CM x weight

(28 - 18) x 80% = 8

deluxe CM x weight

(50 - 30) x 20% = 4

total 12 dollars

break even in units:

fixed cost / sales mix CM

`(Fixed\:Cost)/(Contribution \:Margin) = Break\: Even\: Point_(units)`

2,250,000 / 12 = 187,500

Now we lumtiply this by each product weight

187,500 x 20% = 37,500 deluxe

187,500 x 980% = 150,000 standard