Reference no: EM132767936

Question - Bhatta Ltd. has three product lines: X, Y and Z. The contribution margins of the products are $3, $2 and $1, respectively. Pawan, the marketing manager, forecasts sales of 200,000 units in the coming period, consisting of: 20,000 units of X; 100,000 units of Y; and, 80,000 units of Z. The company's fixed costs for the period are $255,000.

Answer each of the following questions setting out your calculations in each case:

(a) Calculate the estimated break-even point in terms of the number of units, assuming that the given sales mix is maintained.

(b) Calculate the estimated sales in terms of the total number of units, assuming that the given sales mix is maintained; the expected profit after tax is $30,600; and, the tax rate is 40%.

(c) Using the original data, calculate the total contribution margin and profit for the total sales of 200,000 units, assuming that the given sales mix is maintained.

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