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How many door handles and how many trim kits must be sold

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Reference no: EM132871610

Problem - Polaris Inc. manufactures two types of metal stampings for the automobile industry: door handles and trim kits. Fixed cost equals $146,000. Each door handle sells for $12 and has variable cost of $9; each trim kit sells for $8 and has variable cost of $5.

How many door handles and how many trim kits must be sold for Polaris to break even?

Assume that Polaris has the opportunity to rearrange its plant to produce only trim kits. If this is done, fixed costs will decrease by $35,000, and 70,000 trim kits can be produced and sold. Is this a good idea? Explain.

Reference no: EM132871610

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