60.1K

Verified Solution

Link Copied!

The Kowalski Company has three product lines of beltsA, B, and Cwith contribution margins of $5, $3, and $2, respectively. The president foresees sales of 176,000 units in the coming period, consisting of 22,000 units of A, 44,000 units of B, and 110,000 units of C. The company's fixed costs for the period are $294,000. Read the requirements Requirement 1. What is the company's breakeven point in units, assuming that the given sales mix is maintained? Begin by determining the sales mix. For every 1 unit of A, 2 units of B are sold, and 5 units of C are sold. Determine the formula used to calculate the breakeven point when there is more than one product sold, then enter the amounts in the formula to calculate the breakeven point in bundles. Fixed costs Contribution margin per bundle = Breakeven point in bundles - X Requirements 1. What is the company's breakeven point in units, assuming that the given sales mix is maintained? 2. If the sales mix is maintained, what is the total contribution margin when 176,000 units are sold? What is the operating income? 3. What would operating income be if 22,000 units of A, 110,000 units of B, and 44,000 units of C were sold? What is the new breakeven point in units if these relationships persist in the next period

Answer & Explanation Solved by verified expert

See Answer