13: Data Table New Customers Upgrade Customers $ 225 $ 125 $ 30 $ 30 Selling price Variable costs Manufacturing Marketing Contribution margin 65 95 15 45 $ 130 80 14: Requirements 1. What is the Record 1-2-3 5.0 breakeven point in units, assuming that the planned 60% / 40% sales mix is attained? 2. If the sales mix is attained, what is the operating income when 210,000 total units are sold? 3. Show how the breakeven point in units changes with the following customer mixes: a. New 40% and upgrade 60% b. New 90% and upgrade 10% c. Comment on the results. 13. Record 1-2-3 is a top-selling electronic spreadsheet product. Record is about to release version 5.0. It divides its customers into two groups: new customers and upgrade customers (those who previously purchased Record 1-2-3, 4.0 or earlier versions). Although the same physical product is provided to each customer group, sizable differences exist in selling prices and variable marketing costs: 13(Click the icon to view the price and cost information.) The fixed costs of Record 1-2-3 5.0 are $16,500,000. The planned sales mix in units is 60% new customers and 40% upgrade customers. Read the requirements 14 Requirement 1. What is the Record 1-2-3 5.0 breakeven point in units, assuming that the planned 60% / 40% sales mix is attained? units are Begin by determining the sales mix. For every bundle (1) units are sold to new customers, and (2) sold to customer who bought upgrades. Determine the formula used to calculate the breakeven point when there is more than one product sold, then enter the amounts in the formula to calculate the breakeven point in bundles. (3) (4) Breakeven point in bundles The breakeven point is units for new customers and units for upgrade customers. Requirement 2. If the sales mix is attained, what is the operating income when 210,000 units are sold? New customers Upgrade customers Total Units sold Total revenue Total variable costs Contribution margin Fixed costs Operating income Requirement 3. Show how the breakeven point in units changes with the following customer mixes: a. New 40% and Upgrade 60% and b. New 90% and Upgrade 10%. a. Begin by determining the sales mix for scenario "a". For every bundle (5) units are sold to new customers, and (6) units are sold to customers who bought upgrades. Calculate the breakeven point in bundles for scenario "a", then determine the breakeven point for new customers and upgrade customers. The breakeven point is bundles. This translates to a breakeven point of units for new customers and units for upgrade customers. b. Now determine the sales mix for scenario "b". For every bundle. (7) units are sold to new customers, and (8) units are sold to customers who bought upgrades. Calculate the breakeven point in bundles for scenario "b", then determine the breakeven point for new customers and upgrade customers. The breakeven point is bundles. This translates to a breakeven point of for new customers and units for upgrade customers. c. Comment on the results. units contribution margin per unit than upgrade As Record increases its percentage of new customers, which have a (9) customers, the number of bundles required to break even