The company Sunshine Inc. produces two products for which the following data is included: ...
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Accounting
- The company Sunshine Inc. produces two products for which the following data is included:
| Product X | Product Y | |
| Sale Price per Unit | 36 | 24 |
| Variable cost per unit | 28 | 12 |
| Total fixed costs | 234,000 |
Assume that products X and Y are normally produced in the ratio of 2 units of The tax rate is 30%.
Required:
Part A- if product X absorbs 60% of the total fixed costs (60% of $234,000), and product Y absorbs the remaining 40% 1. Calculate the break even point for the product 2. Determine the percentage contribution margin per product (% contribution margin) 3. Calculate the total margin of safety. 4. At what price would product Would this strategy be appropriate? Explain.
Part B- If X and Y are produced in the original proportions (sales mix, break even multiple products), calculate the number of units that would have to be produced of both products if a net income of $84,000 is to be generated.
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