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Manchester Shoes Sells a Range of Umbrellas -The Company's Total Monthly Fixed Expense Is £13,800

Question 35

Multiple Choice

Manchester Shoes sells a range of umbrellas. All of the products have the same selling price and variable cost per unit. The following data has been prepared by the management accountant.  standard  Deluxe Selling price. £40£55 Variable production cost.£10£16Variable selling and administrative expense. £15£12 Expected monthly sales in units. 6001,200\begin{array}{lrr}&\text { standard }&\text { Deluxe }\\ \text {Selling price. } &£ 40 &£ 55 \\ \text { Variable production cost.} &£ 10& £ 16\\ \text {Variable selling and administrative expense. } & £ 15 &£ 12\\ \text { Expected monthly sales in units. } &600 & 1,200 \\\end{array}


-The company's total monthly fixed expense is £13,800. If the expected monthly sales in units were divided equally between the two models (900 Standard and 900 Deluxe) , the break-even level of sales would be


A) lower than with the expected sales mix.
B) higher than with the expected sales mix.
C) the same as with the expected sales mix.
D) cannot be determined with the available data.

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