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Question - Fitch Ltd. produces lighting fixtures. For the upcoming period, the company has provided the following budget information for two of its product lines:
Table lamps
Floor lamps
Total
Sales (units)
100,000
500,000
600,000
Sales
$6,100,000
$52,000,000
$58,100,000
Variable costs
2,600,000
22,500,000
25,100,000
Contribution margin
3,500,000
29,500,000
33,000,000
Deduct: product line fixed costs
2,700,000
28,200,000
30,900,000
Product line operating profit (loss)
$800,000
$1,300,000
$2,100,000
Assuming the sales mix remains as budgeted, how many table lamps must be part of the sales mix for Fitch to break even?
a) 53,185
b) 93,637
c) 468,185
d) 561,822
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