Break – Even point Assignment | Custom Assignment Help
Patriot Co. manufactures and sells three products: red, white, and blue. Their unit selling prices are red, $63; white, $93; and blue, $118. The per-unit variable costs to manufacture and sell these products are red, $48; white, $68; and blue, $88. Their sales mix is reflected in a ratio of 4:5:2 (red:white: blue). Annual fixed costs shared by all three products are $158,000. One type of raw material has been used to manufacture all three products. The company has developed new material of equal quality for less cost. The new material would reduce variable costs per unit as follows: red, by $7; white, by $17; and blue, by $11. However, the new material requires new equipment, which will increase annual fixed costs by $28,000.
1. Assume if the company continues to use the old material, determine its break-even point in both sales units and sales dollars of each individual product. (Round composite units up to next whole number.)
1 . Determine its break-even point in both sales units and sales dollars of each individual product determine the selling price per composite unit.RatioSoiling price per unit total per composite unitRedwhiteDetermine the variable costs per composite unitRatioVariable cost per unit total for composite unitRedWhiteBlueDetermine the break-even point in the composite unit. Choose NumeratorChoose DenominatorsBreak Even UnitsBreak even unitsDetermine its break-even point in units and sales dollars of each individual product.NumberNumber of composite units units sales at the I Dolat sales at the-composite break even break – Avon point break-even poinunitRedwhiteBLUE