Reference no: EM132543677

Question - Make It Shine Corp. can produce two types of lamps, the Table Top Model and the Floor model. The Table Top Modelis sold for $90 and has variable costs of $25. The Floor Model sells for $110 and has variable costs of $20. The company currently sells 3,000 units of Table Top and 4,500 units of the Floor Model. Their break-even point is 15,000 units at the current sales mix. Fixed costs equal $1,200,000.

The company is considering buying new production equipment. The new equipment will increase the fixed cost by $208,000 per year and will decrease the variable cost of the Table Top and Floor Models by $5 and $10, respectively. Assuming the same sales mix, how many of each type of lamps does Make It Shine need to sell to break even?

a. 6,400 units Of Table Top and 9,600 units of Floor Model.

b. 10,400 units Of Table Top and 15,600 units of Floor Model.

c. 6,000 units Of Table Top and 9,000 units of Floor Model.

d. 7,500 units Of Table Top and 10,000 units of Floor Model.