Reference no: EM132528568

Maxie Pty Ltd makes and sells two types of shoes, Plain and Fancy. Product data is as follows:

                                                 Plain                    Fancy

Unit selling price               $20.00                  $35.00

Variable costs per unit        $12.00                 $24.50

Sixty per cent of the sales in units are Plain and annual fixed expenses are $45 000 and the sales mix remains constant. Assume an income tax rate of 20 per cent.

Question 1: The break-even point for this data is 5 000 units in total. How will the calculation of the break-even point change (if at all) if the relative percentages of the products in the mix change from 60% to 40%?