4 lee co has two products regular and luxury

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Unformatted text preview: company’s break-even point. 2 ACCT 2200 7.4 Lee Co. has two products regular and luxury. Historical records show that the company always sells the two products at a constant mix around 2:1; i.e. for every two units of regular sold, the company will sell one unit of luxury. Price and cost information is as follows: Product Price($) Variable cost per unit ($) Regular 12 8 Luxury 30 20 The company has total fixed costs $180,000. What is the break-even sales quantity for each product? FC $180,000 Break-even sales Quantity 0 = 24L + 30L - 180,000 - 16L - 20L 0 = 18L -180,000 Luxury = 10,000 units Regular = 20,000 units 7.5 Brad’s Bicycle Shop sells 21- speed bicycles. For purposes of a cost-volume-profit analysis, the shop owner has divided sales into two categories, as follows: PRODUCT TYPE SALES PRICE INVOICE COST High-quality………………. $1,000 $550 Medium-quality…………… 600 270 SALES CO...
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This document was uploaded on 02/03/2014.

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