The J&J Company has three product lines ofbelts—A, B, and C—having contribution margins of$3, $2, and $1, respectively. The president foreseessales up to 200,000 units in the coming period, consisting of 20,000 units of A, 100,000 units of B, and80,000 units of C. The company’s fixed costs for theperiod are $255,000.(a) What is the company’s break-even point inunits, assuming that the given sales mix ismaintained?(b) If the mix is maintained, what is the total contribution margin when 200,000 units are sold?What is the operating income?(c) What would the operating income become if20,000 units of A, 80,000 units of B, and 100,000units of C were sold? What is the new break-evenpoint in units if these relationships persist in thenext period?
The J&J Company has three product lines of
belts—A, B, and C—having contribution margins of
$3, $2, and $1, respectively. The president foresees
sales up to 200,000 units in the coming period, consisting of 20,000 units of A, 100,000 units of B, and
80,000 units of C. The company’s fixed costs for the
period are $255,000.
(a) What is the company’s break-even point in
units, assuming that the given sales mix is
maintained?
(b) If the mix is maintained, what is the total contribution margin when 200,000 units are sold?
What is the operating income?
(c) What would the operating income become if
20,000 units of A, 80,000 units of B, and 100,000
units of C were sold? What is the new break-even
point in units if these relationships persist in the
next period?
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