Annalise Industries has provided the following information with respect to its year 2012 activities.

Required:
a. Calculate the break-even point in total units and units per product based on the 2012 data.
b. Calculate the profit (loss) achieved in 2012.
c. Management is concerned about increasing competition for some of its products, and wants to increase its sales of product D relative to product C. The initiative would increase annual fixed costs by $50 000 and alter the sales mix to 25 per cent (product A), 15 per cent (product B), 40 percent (product C) and 20 per cent (product D). On the available data, would you recommend the initiative?

Transcribed Image Text:

Product A Sales mix (200 000 units)50 000 Selling price Variable cost unit Total fixed costs $450 000 Product B 30 000 $15 10 Product C 100 000 $8 Product D 20 000 $25 15 $10