On-the-Go, Inc., produces two models of traveling cases for laptop computersthe Programmerand the Executive. The...
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On-the-Go, Inc., produces two models of traveling cases for laptop computersthe Programmerand the Executive. The bags have the following characteristics.
Programmer
Selling price per bag $70
Executive
Selling price per bag $90
Programmer
Variable cost per bag - $40
Executive
Variable cost per bag - $30
Programmer
Expected sales (bags) per year - $7000
Executive
Expected sales (bags) per year- $10,500
The total fixed costs per year for the company are $672,000.
Required:
a.What is the anticipated level of profits for the expected sales volumes?
b.Assuming that the product mix is the same at the break-even point, compute the break-even point.
c.If the product sales mix were to change to nine Programmer-style bags for each Executive-style bag, what would be the new break-even volume for On-the-Go?
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