Karen's Klothes sells blouses for women and girls.The average selling price and variable cost for each product are as follows:

Fixed costs are $30,000 and cannot be separated evenly between the two products.
Required:
a.What is the break-even point in units for each type of blouse assuming the sales mix is 2:1 in favour of women's blouses? Total sales cannot exceed 7,000 units due to space constraints.
b.What is the operating income assuming the sales mix is 2:1 in favour of women's blouses,and sales total 9,900 blouses?

Question

Karen's Klothes sells blouses for women and girls.The average selling price and variable cost for each product are as follows:
  
Fixed costs are $30,000 and cannot be separated evenly between the two products.
Required:
a.What is the break-even point in units for each type of blouse assuming the sales mix is 2:1 in favour of women's blouses? Total sales cannot exceed 7,000 units due to space constraints.
b.What is the operating income assuming the sales mix is 2:1 in favour of women's blouses,and sales total 9,900 blouses?

Quizplus · Accepted Answer

The Answer of Karen's Klothes sells blouses for women and girls.The average selling price and variable cost for each product are as follows:
  
Fixed costs are $30,000 and cannot be separated evenly between the two products.
Required:
a.What is the break-even point in units for each type of blouse assuming the sales mix is 2:1 in favour of women's blouses? Total sales cannot exceed 7,000 units due to space constraints.
b.What is the operating income assuming the sales mix is 2:1 in favour of women's blouses,and sales total 9,900 blouses?

Karen's Klothes Sells Blouses for Women and Girls