The Barnes Company manufactures two products. Information about the two product lines is as follows:
The company expects fixed costs to be £189,000. The firm expects 60 percent of its sales (in units) to be Product K (a sales mix of 3:2).
Required:

a.
Calculate the contribution margin per package.
b.
Determine the break-even point in units for Product K and Product Y.
c.
Determine the level of sales (in pounds) necessary to generate a before-tax profit of £135,000.

Question

The Barnes Company manufactures two products. Information about the two product lines is as follows:
The company expects fixed costs to be £189,000. The firm expects 60 percent of its sales (in units) to be Product K (a sales mix of 3:2).
Required:
  
a.
Calculate the contribution margin per package.
b.
Determine the break-even point in units for Product K and Product Y.
c.
Determine the level of sales (in pounds) necessary to generate a before-tax profit of £135,000.

Quizplus · Accepted Answer

The Answer of The Barnes Company manufactures two products. Information about the two product lines is as follows:
The company expects fixed costs to be £189,000. The firm expects 60 percent of its sales (in units) to be Product K (a sales mix of 3:2).
Required:
  
a.
Calculate the contribution margin per package.
b.
Determine the break-even point in units for Product K and Product Y.
c.
Determine the level of sales (in pounds) necessary to generate a before-tax profit of £135,000.

The Barnes Company Manufactures Two Products