Answer A.
Anticipated profit | $4,620,000 |
Explanation:
AU | NZ | Total | |
Selling price per unit | $140 | $140 | |
Variable cost per unit | 80 | 40 | |
Contribution per unit | 60 | 100 | |
* Expected units sold | 75,000 units | 25,000 units | |
Total Contribution | 4,500,000 | 2,500,000 | 7,000,000 |
Less: Fixed costs | 2,380,000 | ||
Anticipated profit | $4,620,000 |
Answer B.
Breakeven point | 34,000 units |
Explanation:
Sales Mix:
For AU = 75,000 units / 100,000 units = 0.75
For NU = 25,000 units / 100,000 units = 0.25
Weighted average contribution = Contribution per unit * Sales Mix
= ($60 * 0.75) + ($100 * 0.25) = $70
Breakeven point in units = Fixed costs / Weighted average contribution
= $2,380,000 / $70 = 34,000 units.
Answer C.
Breakeven point | 35,000 units |
Explanation:
Sales Mix:
For AU = 4 / 5 = 0.80
For NU = 1 / 5 = 0.20
Weighted average contribution = Contribution per unit * Sales Mix
= ($60 * 0.80) + ($100 * 0.20) = $68
Breakeven point in units = Fixed costs / Weighted average contribution
= $2,380,000 / $68 = 35,000 units
Sundial, Inc., produces two models of sunglasses-AU and NZ. The sunglasses have the following characteristics. Selling...
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i-Ch 1,2,3 Saved Help Sundial, Inc., produces two models of sunglasses--AU and NZ. The sunglasses have the following characteristics. Selling price per unit Variable cost per unit Expected units sold per year AU $ 500 $ 200 40,000 NZ $ 500 $ 250 60,000 The total fixed costs per year for the company are $7,830,000. Required: a. What is the anticipated level of profits for the expected sales volumes? b. Assuming that the product mix is the same at the...
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Sundial, Inc. produces two models of sunglasses-AU and NZ. The sunglasses have the following characteristics Selling price per unit Variable cost per unit Expected units sold per year AU $ 360 $ 60 50,000 NZ S 360 $ 180 75,000 The total fixed costs per year for the company are $5,244,000. Required: a. What is the anticipated level of profits for the expected sales volumes? b. Assuming that the product mix is the...
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