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Question - XYZ Company annually sells 2000 units of product A and 8000 units of product B. Product A sells for $14 and costs $6 to manufacture. Product B sells for $12 and costs $6 to manufacture. Fixed costs are $18,000.
a) What is the net income with this sales mix
b) How many units of A & B must be sold for the company to breakeven?
c) How would your answer change if the sales mix was 8000 of product A and 2000 of product B?
d) What would you recommend to management about the sales mix of product A & B?
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