Aussie Boomerangs Inc. has three models of boomerangs that they sell online throughout the world: the Standard,
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Question:
Aussie Boomerangs Inc. has three models of boomerangs that they sell online throughout the world: the Standard, the Superior and the Supreme models. Present revenue, cost and sales for the three models follow:
Standard | Superior | Supreme | |
Selling Price | $15 | $45 | $100 |
Variable costs | $9 | $36 | $20 |
Units sold annually | 20,000 | 10,000 | 5,000 |
Fixed expenses total $475,800 per year.
Required:
- Assuming the sales mix that is given above, calculate the breakeven point in units.
- Compute the Company’s margin of safety in sales dollars.
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