Perrson Company makes two types of backpacks. Data for the companys activity during a typical month are presented below:
Selling price per unit
Variable expense per unit
The companys total fixed expenses are $80,000. There are no beginning or ending inventories.
A. What is the per unit contribution margin for each of the two models?
B. What is the break-even point in terms of sales dollars if the sales mix remains constant?
Break-even point (in sales) = Fixed cost * selling price per unit
C. If the sales mix is changed to 60,000 units of
the school model and 20,000 units of the hiker model, what will be the
break-even point in terms of sales dollars?