Question: 2 Sales mix, two products. The Stackpole Company retails two products: a standard and a deluxe version of a luggage carrier. The budgeted income

2 Sales mix, two products. The Stackpole Company retails two products: a

2 Sales mix, two products. The Stackpole Company retails two products: a standard and a deluxe version of a luggage carrier. The budgeted income statement for next period is as follows: Standard carrier Delux carrier total Units sold 187500 62500 250000 Revenues at $28 and $50 5250000 3125000 8375000 per unit Variable costs at $18 and 375000 1875000 5250000 $30 per unit Contribution margins at 1875000 1250000 3125000 $10 and $20 per unit Fixed costs 2300000 2300000 825000 Operating income Required I. Compute the breakeven point in units, assuming that the planned sales mix is attained. ii. Compute the breakeven point in units (a) if only standard carriers are sold and (b) if only deluxe carriers are sold. iii. Suppose 250,000 units are sold but only 50,000 of them are deluxe. Compute the operating income. Compute the breakeven point in units. Compare your answer with the answer to requirement 1. What is the major lesson of this problem?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!