# A find the break even point in dollars of a1 and a2 b

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a. Find the break-even point in dollars of A1 and A2. b. If St. Pete Company purchased a piece of equipment that added an additional \$4,000 to fixed costs, how many units of each product would be needed to generate an 11% return on sales revenue after taxes?

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PROBLEM 11-9 Zippo Company produces two hand held video games named Crazy Monkey (X1) and Power Pig (X2). The games have the following cost and selling prices. Product X1 X1 Sales Price \$10 \$12 Variable Manufacturing Costs 4 3 Manufacturing Margin 6 9 Variable Selling & Adm. Costs 2 2 Contribution Margin 4 7 Total Fixed Costs: Manufacturing \$200,000. Selling & Administrative 58,000. The budgeted sales mix is based on past experience which indicates that the company typically sells twice as many X1's as it does X2's. For some reason, Crazy Monkeys are twice as popular as Power Pigs. REQUIRED: a. Determine the number of units of each product the firm would need to produce and sell to break-even based on the budgeted sales mix. b. Determine the number of units of each product the firm would need to produce and sell to generate budgeted net income after taxes equal to 12 percent of budgeted sales dollars. Assume the tax rate is 40%.
c. Assume that the non-cash fixed costs (i.e., costs that do not require a cash payment) are \$55,800. Find the cash flow break-even point in units of X1 and X2.
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