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Paddleboard Incorporated Builds Three Products: River,Lake,and Ocean Total Annual Fixed Costs Are $765,000

Question 78

Essay

Paddleboard Incorporated builds three products: River,Lake,and Ocean.Information for these three products is shown below:

 River  Lake  Ocean  Total  Selling price per unit $300$250$275 Variable cost per unit $175$150$125 Expected unit sales (annual) 14,0002,0004,00020,000 Sales mix 70%10%20%100%\begin{array}{lcccc}& \text { River } & \text { Lake } & \text { Ocean } & \text { Total } \\\text { Selling price per unit } & \$ 300 & \$ 250 & \$ 275 & \\\text { Variable cost per unit } & \$ 175 & \$ 150 & \$ 125 & \\\text { Expected unit sales (annual) } & 14,000 & 2,000 & 4,000 & 20,000 \\\text { Sales mix } & 70 \% & 10 \% & 20 \% & 100 \%\end{array}
Total annual fixed costs are $765,000.Assume the sales mix remains the same at all levels of sales.
(1) a.How many products in total must be sold to break even?
b.How many units of each product must be sold to break even?
(2)a.How many products in total must be sold to earn an annual profit of $1,275,000?
b.How many units of each product must be sold to earn an annual profit of $1,275,000?

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b. As calculated in part blured image paddleboards m...

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