Multiple-Product Cost-Volume-Profit Analysis
Alpha Company produces and sells two products: Alpha-Basic and Alpha-Deluxe. In the coming year, Alpha expects to sell 3,000 units of Alpha-Basic and 1,500 units of Alpha- Deluxe. Information on the two products is as follows:
| |
Alpha-Basic |
Alpha-Deluxe |
|
Price
|
$120
|
$200
|
|
Variable cost per unit
|
40
|
80
|
Total fixed costs are $140,000.
Required:
1. What is the sales mix of Alpha-Basic to Alpha-Deluxe?
2. Compute the break-even quantity of each product.