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What is the anticipated level of profits for expected sales

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Reference no: EM132562279

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

                                                                    AU                       NZ

Selling price per unit                             $220                 $220

Variable cost per unit                             $120               $80

Expected units sold per year                     60,000                40,000

The total fixed costs per year for the company are $3,132,000.

Required:

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

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

Question 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: EM132562279

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