Both Best Buy and Circuit City sell numerous consumer products, and each of these companies has a different product mix.

Required
1. Assume the following data are available for both companies. Compute each company€™s break-even point in unit sales. (Each company sells many products at many different selling prices, and each has its own variable costs. This assignment assumes an average selling price per unit and an average cost per item.)

2. If unit sales were to decline, which company would experience the larger decline in operating profit?Explain.

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Circuit City $40 $30 Best Buy Average selling price per item sold . $90 $64 Average variable cost per item sold . Total fixed costs T $5.980 million $2,570 million