Question: Ronowski Company has three product lines of belts A B

Ronowski Company has three product lines of belts, A, B, and C, with contribution margins of $3.60, $2.40, and $1.20 respectively. The president forecasts sales of 200,000 units in the coming period, consisting of 20,000 units of A, 100,000 units of B, and 80,000 units of C. The company's fixed costs for the period are $306,000.
1. What is the company breakeven point in units, assuming that the given revenue mix is maintained?
2. If the mix is maintained, what is the total contribution margin when 200,000 units are sold? What is the operating income?
3. What would operating income become if 20,000 units of A, 80,000 units of B, and 100,000 units of C were sold? What is the new breakeven point in units if these relationships persist in the next period?

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  • CreatedJuly 31, 2015
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