Cali Windows plans to sell two different brands of Windows chad and musk and budgets the following:
Question:
Cali Windows plans to sell two different brands of Windows chad and musk and budgets the following:
Chad Windows
Musk Windows
Total
Expected sales
4,400
2,200
6,600
Revenues, $850 and $600 per unit
$3,740,000
$1,320,000
$5,060,000
Variable costs, $750 and $550 per unit
3,300,000
1,210,000
4,510,000
Contribution margin, $100 and $50 per unit
$440,000
$110,000
$550,000
Fixed costs
185,000
Operating income365,000
Calculate the breakeven point for
Cali Windows in terms of(a) the number of units sold and(b) revenues.
Begin by determining the sales mix. (The windows can only be sold in whole units. Enter the ratios as wholenumbers.)
A budgeted sales mix of
units of Chad Windows sold for every
units of Musk Windows sold,
is a ratio of
:
. That is, we think of Cali Windows selling a bundle of
units of Chad Windows and
unit(s) of Musk Windows.
Expert Answer:
To calculate the breakeven point we need to determine the sales mix first Lets find the ratio of Cha... View the full answer
