Fine Suiting Company sells shirts for men and boys.The average selling price and variable cost for each product are as follows:
$\begin{array}{llll}&\text { Men's }&&\text { Boys }\
\text { Selling Price } & \$ 25.00 & \text { Selling Price } & \$ 24.00 \
\text { Variable Cost } & \$ 15.40 & \text { Variable Cost } & \$ 16.00
\end{array}$
$\text { Fixed costs are } \$ 35,200 \text {. }$ Required:
a.What is the breakeven point in units for each type of shirt,assuming the sales mix is 1:1?
b.What is the operating leverage,assuming the sales mix is 2:1 in favor of men's shirts,and sales total 5,000 shirts?

Question

Fine Suiting Company sells shirts for men and boys.The average selling price and variable cost for each product are as follows:
 $\begin{array}{llll}&\text { Men's }&&\text { Boys }\
\text { Selling Price } & \$ 25.00 & \text { Selling Price } & \$ 24.00 \
\text { Variable Cost } & \$ 15.40 & \text { Variable Cost } & \$ 16.00
\end{array}$
$\text { Fixed costs are } \$ 35,200 \text {. }$ Required:
a.What is the breakeven point in units for each type of shirt,assuming the sales mix is 1:1?
b.What is the operating leverage,assuming the sales mix is 2:1 in favor of men's shirts,and sales total 5,000 shirts?

Quizplus · Accepted Answer

The Answer of Fine Suiting Company sells shirts for men and boys.The average selling price and variable cost for each product are as follows:
 $\begin{array}{llll}&\text { Men's }&&\text { Boys }\
\text { Selling Price } & \$ 25.00 & \text { Selling Price } & \$ 24.00 \
\text { Variable Cost } & \$ 15.40 & \text { Variable Cost } & \$ 16.00
\end{array}$
$\text { Fixed costs are } \$ 35,200 \text {. }$ Required:
a.What is the breakeven point in units for each type of shirt,assuming the sales mix is 1:1?
b.What is the operating leverage,assuming the sales mix is 2:1 in favor of men's shirts,and sales total 5,000 shirts?

Fine Suiting Company Sells Shirts for Men and Boys Fixed costs are $35,200. \text { Fixed costs are } \$ 35,200 \text {. } Fixed costs are $35,200.

Fine Suiting Company Sells Shirts for Men and Boys $\text { Fixed costs are } \$ 35,200 \text {. }$