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How many units of each product whitt must sell

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Reference no: EM13325982

Whitt company manufactures a line of electric garden tools that are sold on general hardware stores. The company controller has just received a sales forecast for the coming year for three product lines. (weeders, hedge clippers, and leaf blowers. Whitt has experienced considerable variations in sales volumes and variable costs over the past two years and the controller believes the forecast should be carefully evaluated from a cost volume profit viewpoint. The preliminary budget info for 2012 is presented below.

                                                                                                Weeders             Clippers                Blowers

 

Unit sales                                                                            50,000                   50,000                   100,000

 

Unit selling price                                                               28.00                     36.00                     48.00

 

Variable manufacturing cost per unit                      13.00                     12.00                     25.00

 

Variable selling cost per unit                                       5.00                        4.00                        6.00

For 2012 Whitt's fixed factory overhead is budgeted at $2 million, and the companys fixed selling and administrative expanses are forecasted to be $500,000. Whitt has a tax rate of 40 percent.

Assuming that the sales mix remains as budgeted determine how many units of each product Whitt must sell in order to breakeven in 2012?

Reference no: EM13325982

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