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Question - A Company in Vaughn manufactures two products and gathered information about the two items as bellow:
Product MX15
Product LX20
Selling price per unit
$40
$60
Variable cost manufacturing cost per unit
16
22
Variable selling cost per unit
8
12
The company expects annual fixed manufacturing costs to be $109,160 and fixed selling costs to be $50,000. The firm's normal annual total sales are 14,000 units, of those 8,400 have been Product MX15 and the remainder are Product LX20.
Required -
1. Determine the break-even point in units for the company's products (i.e., show the number of units for each product: MX15 and LX20).
2. Determine the level of sales (in dollars) necessary to generate an operating income of $75,000.
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