The Double Arthur Company (DAC) has three product lines of coffee mugs — Earth, Sun and Mun — with contribution margins of $9, $8, and $5 respectively. The president Maxat Jexembay foresees sales, consisting of 40K units of Earth, 100K units of Sun, and 100K units of Mun. The company’s fixed costs for the period are $600000. 1. What would the new breakeven point in units be if these relationships persist in the next period? 2. What would the new operating income be if these relationships persist in the next period?

The Double Arthur Company (DAC) has three product lines of coffee mugs — Earth, Sun and Mun — with contribution margins of $9, $8, and $5 respectively. The president Maxat Jexembay foresees sales, consisting of 40K units of Earth, 100K units of Sun, and 100K units of Mun. The company’s fixed costs for the period are $600000. 1. What would the new breakeven point in units be if these relationships persist in the next period? 2. What would the new operating income be if these relationships persist in the next period?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 2E

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