Lakers Company produces two products.The following information is available:
$\begin{array}{lll}&\text { Product X }&\text { Product Y }\
\text { Selling price per unit } & \$ 46 & \$ 36 \
\text { Variable cost per unit } & \$ 38 & \$ 24
\end{array}$
Total fixed costs are $234,000.Lakers plans to sell 21,000 units of Product X and 7,000 units of Product Y.
Required:
A) Compute the contribution margin for each product.
B) What is the expected net income?
C) Assume the sales mix is 3 units of Product X for every 1 unit of Product Y.
What is the break-even point in units for each product?
D) Assume the sales mix is 3 units of Product X for every 2 units of Product Y.
What is the break-even point in units for each product?

Question

Lakers Company produces two products.The following information is available:
 $\begin{array}{lll}&\text { Product X }&\text { Product Y }\
\text { Selling price per unit } & \$ 46 & \$ 36 \
\text { Variable cost per unit } & \$ 38 & \$ 24
\end{array}$ 
Total fixed costs are $234,000.Lakers plans to sell 21,000 units of Product X and 7,000 units of Product Y.
Required: 
A) Compute the contribution margin for each product.
B) What is the expected net income?
C) Assume the sales mix is 3 units of Product X for every 1 unit of Product Y.
What is the break-even point in units for each product?
D) Assume the sales mix is 3 units of Product X for every 2 units of Product Y.
What is the break-even point in units for each product?

Quizplus · Accepted Answer

The Answer of Lakers Company produces two products.The following information is available:
 $\begin{array}{lll}&\text { Product X }&\text { Product Y }\
\text { Selling price per unit } & \$ 46 & \$ 36 \
\text { Variable cost per unit } & \$ 38 & \$ 24
\end{array}$ 
Total fixed costs are $234,000.Lakers plans to sell 21,000 units of Product X and 7,000 units of Product Y.
Required: 
A) Compute the contribution margin for each product.
B) What is the expected net income?
C) Assume the sales mix is 3 units of Product X for every 1 unit of Product Y.
What is the break-even point in units for each product?
D) Assume the sales mix is 3 units of Product X for every 2 units of Product Y.
What is the break-even point in units for each product?

Lakers Company Produces Two Products Total Fixed Costs Are $234,000