Shoosta Ltd produces two different products with the following monthly data: A1 A2 Total Selling price per unit $100 $12 Variable cost per unit $ 70 $ 3 Expected unit sales 21,000 14,000 35,000 Sales mix 60 percent 40 percent 100 percent Fixed costs $500,000
Shoosta Ltd produces two different products with the following monthly data: A1 A2 Total Selling price per unit $100 $12 Variable cost per unit $ 70 $ 3 Expected unit sales 21,000 14,000 35,000 Sales mix 60 percent 40 percent 100 percent Fixed costs $500,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Shoosta Ltd produces two different products with the following monthly data:
A1 A2 Total
Selling price per unit $100 $12
Variable cost per unit $ 70 $ 3
Expected unit sales 21,000 14,000 35,000
Sales mix 60 percent 40 percent 100 percent
Fixed costs $500,000
Assume the sales mix remains the same at all levels of sales.
Round to the nearest unit of product, hundredth of a per cent, and nearest cent where appropriate.
Required (show your workings for each question):
f) Would the CVP Analysis technique be appropriate for multi-product businesses operating during this global pandemic? Explain.
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