Question - ABC Company produces two types of frozen dinners, Pasta and Turkey. The budget data for next year are:
|
Pasta
|
Turkey
|
|
Sale price per unit
|
$5.60
|
$7.20
|
|
Less: Variaable expenses
|
$3.20
|
$4.00
|
|
Contribution margin
|
$2.40
|
$3.20
|
|
Number of units
|
200,000
|
100,000
|
|
Fixed costs
|
$ 1,056,000.00
|
|
The fixed costs are not affected by the number of specific products sold.
Required:
Compute the planned net income for next year.
Compute the break-even point in units, assuming that the planned sales mix remains the same.
Compute the break-even point if only Pasta were sold.