Question

The Bose Company produces two types of exercise machines, Ready(A1) and Steady (A2). Relevant data are as follows: Product Contribution Margin Per Unit Budgeted Sales Mix in Units A1 A2 $100 200 60% 40% The company's total fixed costs amount to $350,000 which represents $200,000 fixed manufacturing overhead and $150,000 fixed selling and administrative expenses Required: a. Determine the number of units of each product the company needs to produce and sell to break-even. b. Determine the number of units of each product needed to generate net income after taxes equal to $96,250. Assume a tax rate of 45%.

Answer 1

Answer: (a.) combined Break Evenpoint in units fixed cost contribution Margin weight average $ 350,000 ($100x60x) + ($200 x 40%) - 2500 units Break Even Point of Al = 2500 units X60% = 1500 units Break Even point of A2 - 2500 units x 40% - 1000 units.

(6.) Let the total neember of units of both product be "s" units. 36250 = [(4100 X 60% Xx) + ($2004 407.*~) - $ 350,000) 454(1-45%) 175000 = 6ont 800 - 350,000 1400 = $525,000 n= 3750 units. so, No. of units of Al = 3750 units Xbox - 2250 units No. of units of A2 = 3750 units X 40% - 1500 units

Thankyou...........