Question

A firm is selling two products, chairs and bar stools, each at $ 50 per unit. Chairs have a variable cost of $ 25, and bar stools $ 20. Fixed cost for the firm is $ 20,000.
a. If the sales mix is 1: 1 (one chair sold for every bar stool sold), what is the break- even point in dollars of sales? In units of chairs and bar stools?
b. If the sales mix changes to 1:4 (one chair sold for every four bar stools sold), what is the break- even point in dollars of sales? In units of chairs and bar stools?



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  • CreatedApril 09, 2014
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