Securiteez offers 2 types of window coverings - automobile and home. For every home window covering sold, Securiteez typically sells 4 auto window coverings. Securiteez charges $120 for each auto window covering and $300 for home window covering. However, given the standardization of the manufacturing process, the variable costs associated with each are the same, at $30 per covering. Overall, Securiteez incurs $320,000 in fixed costs per period.
Using CVP analysis and assuming a constant sales mix, how many of each covering type must Insurity sell to realize a pre-tax profit of $800,000?

Question

Securiteez offers 2 types of window coverings - automobile and home. For every home window covering sold, Securiteez typically sells 4 auto window coverings. Securiteez charges $120 for each auto window covering and $300 for home window covering. However, given the standardization of the manufacturing process, the variable costs associated with each are the same, at $30 per covering. Overall, Securiteez incurs $320,000 in fixed costs per period. 
Using CVP analysis and assuming a constant sales mix, how many of each covering type must Insurity sell to realize a pre-tax profit of $800,000?

Quizplus · Accepted Answer

The Answer of Securiteez offers 2 types of window coverings - automobile and home. For every home window covering sold, Securiteez typically sells 4 auto window coverings. Securiteez charges $120 for each auto window covering and $300 for home window covering. However, given the standardization of the manufacturing process, the variable costs associated with each are the same, at $30 per covering. Overall, Securiteez incurs $320,000 in fixed costs per period. 
Using CVP analysis and assuming a constant sales mix, how many of each covering type must Insurity sell to realize a pre-tax profit of $800,000?

Securiteez Offers 2 Types of Window Coverings - Automobile and Home