The Matrix Company has three product lines of belts—A, B, and C—with contribution margins of $7, $5, and $4, respectively. The president foresees sales of 400,000 units in the coming period, consisting of 40,000 units of A, 200,000 units of B, and 160,000 units of C. The company’s fixed costs for the period are $1,020,000.

Required

1. What is the company’s breakeven point in units, assuming that the given sales mix is maintained?
2. If the sales mix is maintained, what is the total contribution margin when 400,000 units are sold? What  is the operating income?
3. What would the operating income be if 40,000 units of A, 160,000 units of B, and 200,000 units of C were sold? What is the new breakeven point in units if these relationships persist in the next period?