Question: please help me answer this using the sales mix. the answers on here are wrong. Inland Company manufactures and sells three products, Red, White and
Inland Company manufactures and sells three products, Red, White and Blue. Their individual selling prices are: Red, \$55 per unit; White, $85 per unit; and Blue, $110 per unit. The variable costs of manufacturing and selling these products are: Red, $40 per unit; White, $60 per unit; and Blue, $80 per unit. Their sales mix is a ratio of 5:4:2 (Red:White:Blue). Annual fixed costs shared by all three products are $150,000. One item of raw materials is used in manufacturing all three products. Management has learned that a new material is of equal quality and less costly. The new material would reduce the variable costs as follows: Red by $10; White by $20, and Blue by $10. But, the new material requires new equipment, which will increase annual fixed costs by $20,000. (In preparing your answers always round up to the nearest whole composite unit.) Required: a. If the company continues to use the old material, determine the company's break-even point in dollars and units of each product that would be sold at the break-even point. b. If the company decides to use the new material, determine the company's new break-even point in dollars and units of each product that would be sold at the break-even point
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