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Question #2 The following is budgeted information for the Sophia Corporation:

Question #2
The following is budgeted information for the Sophia Corporation:
Product 1 Product 2
Annual production & sales 5,000 15,000
Projected selling price $24 $32

Direct Production Cost Information
Materials (per unit) $5 $7
Direct Labor (per unit) $8 $12

Additional information:
• Manufacturing overhead costs (a mixed cost) are budgeted to be $160,000 at the production and sales listed above. The fixed component is $100,000. Each product uses the same amount of variable manufacturing overhead per unit.
• Selling & administrative costs (a mixed cost) are budgeted to be $120,000 at the production and sales listed above. The variable component is $2 per unit (same for each product).
Assuming the budgeted sales mix remains intact, how many units of each product does Sophia need to sell in order to break even?

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