What is the anticipated level of profits

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Question - Sundial, Inc., produces two models of sunglasses-AU and NZ. The sunglasses have the following characteristics.

 

AU

NZ

Selling price per unit

$280

$280

Variable cost per unit

$60

$140

Expected units sold per year

50,000

75,000

The total fixed costs per year for the company are $8,772,000.

Required -

a. What is the anticipated level of profits for the expected sales volumes?

b. Assuming that the product mix is the same at the break-even point, compute the break-even point.

c. If the product sales mix were to change to four pairs of AU sunglasses for each pair of NZ sunglasses, what would be the new break-even volume for Sundial, Inc.?

Reference no: EM133165422

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