The O'Brien Company sells two products,A and B,with contribution margin ratios of 40 and 30 percent and selling prices of $5 and $2.50 a unit.Fixed costs amount to $72,000 a month.Monthly sales average 30,000 units of product A and 40,000 units of product B.
Required:
a. Assuming that three unts of product $ A $ are sold for every four unins of product $ B $, calculate the dollar sales volume necessary to break even.
b. As part of its cost accounting routine, O'Brien Company assigns $ \$ 36,000 $ in fixed costs to each prochuct each month. Calculat the break-even dollar sales volume for each product.
c. O'Brien Company is considering spending an additional $ \$ 9,700 $ a month on advertising, giving more emphasisto product $ A $ andless emphasis to prochuct $ \mathrm{B} $. If its analysisis correct, sales of prochuct $ \mathrm{A} $ will increase to 40,000 units a month, but sale of product B will fall to 32,000 units a month Recalculate the break-even sales volume, in dollars, at this new product mix. Should the proposal to spend the additional $ \$ 9,700 $ a month be accepted?

Question

The O'Brien Company sells two products,A and B,with contribution margin ratios of 40 and 30 percent and selling prices of $5 and $2.50 a unit.Fixed costs amount to $72,000 a month.Monthly sales average 30,000 units of product A and 40,000 units of product B.
Required:
 a. Assuming that three unts of product $ A $ are sold for every four unins of product $ B $, calculate the dollar sales volume necessary to break even.
b. As part of its cost accounting routine, O'Brien Company assigns $ \$ 36,000 $ in fixed costs to each prochuct each month. Calculat the break-even dollar sales volume for each product.
c. O'Brien Company is considering spending an additional $ \$ 9,700 $ a month on advertising, giving more emphasisto product $ A $ andless emphasis to prochuct $ \mathrm{B} $. If its analysisis correct, sales of prochuct $ \mathrm{A} $ will increase to 40,000 units a month, but sale of product B will fall to 32,000 units a month Recalculate the break-even sales volume, in dollars, at this new product mix. Should the proposal to spend the additional $ \$ 9,700 $ a month be accepted?

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The Answer of The O'Brien Company sells two products,A and B,with contribution margin ratios of 40 and 30 percent and selling prices of $5 and $2.50 a unit.Fixed costs amount to $72,000 a month.Monthly sales average 30,000 units of product A and 40,000 units of product B.
Required:
 a. Assuming that three unts of product $ A $ are sold for every four unins of product $ B $, calculate the dollar sales volume necessary to break even.
b. As part of its cost accounting routine, O'Brien Company assigns $ \$ 36,000 $ in fixed costs to each prochuct each month. Calculat the break-even dollar sales volume for each product.
c. O'Brien Company is considering spending an additional $ \$ 9,700 $ a month on advertising, giving more emphasisto product $ A $ andless emphasis to prochuct $ \mathrm{B} $. If its analysisis correct, sales of prochuct $ \mathrm{A} $ will increase to 40,000 units a month, but sale of product B will fall to 32,000 units a month Recalculate the break-even sales volume, in dollars, at this new product mix. Should the proposal to spend the additional $ \$ 9,700 $ a month be accepted?

The O'Brien Company Sells Two Products,A and B,with Contribution Margin A A A

The O'Brien Company Sells Two Products,A and B,with Contribution Margin $A$