Maryland Company offers two products. At present, the following represents the usual results of a month's operations:

Required:
a. Find the combined break-even point in dollars.
b. Find the margin of safety in dollars.
c. The company is considering decreasing product XX's unit sales to 80,000 and increasing product ZZ's unit sales to 180,000, leaving unchanged the selling price per unit, variable cost per unit, and total fixed costs. Would you advise adopting this plan?
d. Refer to (c) above. Under the new plan, find the break-even point in dollars.
e. Under the new plan in (c) above, find the margin of safety in dollars.

Question

Maryland Company offers two products. At present, the following represents the usual results of a month's operations:
  
Required:
a. Find the combined break-even point in dollars.
b. Find the margin of safety in dollars.
c. The company is considering decreasing product XX's unit sales to 80,000 and increasing product ZZ's unit sales to 180,000, leaving unchanged the selling price per unit, variable cost per unit, and total fixed costs. Would you advise adopting this plan?
d. Refer to (c) above. Under the new plan, find the break-even point in dollars.
e. Under the new plan in (c) above, find the margin of safety in dollars.

Quizplus · Accepted Answer

The Answer of Maryland Company offers two products. At present, the following represents the usual results of a month's operations:
  
Required:
a. Find the combined break-even point in dollars.
b. Find the margin of safety in dollars.
c. The company is considering decreasing product XX's unit sales to 80,000 and increasing product ZZ's unit sales to 180,000, leaving unchanged the selling price per unit, variable cost per unit, and total fixed costs. Would you advise adopting this plan?
d. Refer to (c) above. Under the new plan, find the break-even point in dollars.
e. Under the new plan in (c) above, find the margin of safety in dollars.

Maryland Company Offers Two Products