Alphabeta Corporation sells three products: J, K, and L. The following information was taken from a recent budget: Unit sales Selling price Variable cost K 130,000 $80 L 30,000 $75 40,000 $60 40 65 50 Total fixed costs are anticipated to be $2,450,000. Required: A. Determine Alphabeta's sales mix. B. Determine the weighted-average contribution margin. C. Calculate the number of units of J, K, and L that must be sold to break even. D. If Alphabeta desires to increase company profitability, should it attempt to increase or decrease the sales of product K relative to those of J and L? Briefly explain.
Alphabeta Corporation sells three products: J, K, and L. The following information was taken from a recent budget: Unit sales Selling price Variable cost K 130,000 $80 L 30,000 $75 40,000 $60 40 65 50 Total fixed costs are anticipated to be $2,450,000. Required: A. Determine Alphabeta's sales mix. B. Determine the weighted-average contribution margin. C. Calculate the number of units of J, K, and L that must be sold to break even. D. If Alphabeta desires to increase company profitability, should it attempt to increase or decrease the sales of product K relative to those of J and L? Briefly explain.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter16: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 2CE
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