Jasmine Park encountered her boss, Bubba Gompers, at the pop machine in the lobby.

Bubba is the vice president of marketing at Down South Lures Corporation. Jasmine was

puzzled by some calculations she had been doing, so she asked him:

Jasimne: “ Bubba, I’m not sure how to go about answering the questions that came up at

the meeting with the president yesterday.”

Bubba: “ What’s the problem?”

Jasmine: “ The president wanted to know the break-even for each of the company’s

products, but I am having trouble figuring them out.”

Bubba: “I’m sure you can handle it, Jasmine. And, by the way, I need your analysis on

my desk tomorrow morning at 8:00 sharp so I can look at it before the follow-up meeting

at 9:00.”

Down South Lures makes three fishing lures in its manufacturing facility in

Alabama. Data concentrating these products appear below.

 

Total fixed expenses for the entire company are $282,000 per year.

All three products are sold in highly competitive markets, so the company is

unable to raise its prices without losing unacceptable numbers of customers.

The company has no work in process or finished goods inventories due to an

extremely effective just-in-time manufacturing system.

Required:

What is the company’s overall break-even in total sales dollars?

Assumption the company will maintain the budgeted sales mix in terms of

number of units of each product sold

Transcribed Image Text:

Frog 100.000 200.000 $2.00 $1.20 Firm 300.000 S0.80 S0.50 Minn Normal annual sales volume Unit selling price. Variable cost per unit S1.40 S0.80