The Jenkins Company has three product lines of beer mugsA, B, and Cwith contribution margins of $4, $3, and $2, respectively. The president foresees sales of 266,000 units in the comingperiod, consisting of 38,000 units ofA, 152,000 units ofB, and 76,000 units of C. Thecompany's fixed costs for the period are $414,000.

1.

What is thecompany's breakeven point inunits, assuming that the given sales mix ismaintained?

2.

If the sales mix ismaintained, what is the total contribution margin when 266,000 units aresold? What is the operatingincome?

3.

What would operating income be if the company sold 38,000 units ofA, 76,000 units ofB, and 152,000 units ofC? What is the new breakeven point in units if these relationships persist in the nextperiod?

4.

Comparing the breakeven points in requirements 1 and3, is it always better for a company to choose the sales mix that yields the lower breakevenpoint? Explain.

Answer rating: 100% (QA)

Lets calculate the required values step by step based on the given information 1 Breakeven Point The breakeven point is the level of sales at which to... View the full answer