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Question - Problem - Extensions of the CVP Model-Multiple Products - On-the-Go, Inc., produces two models of traveling cases for laptop computers-the Programmer and the Executive. The bags have the following characteristics.
Programmer
Executive
Selling price per bag
$60
$90
Variable cost per bag
$20
$40
Expected sales (bags) per year
7,000
10,500
The total fixed costs per year for the company are $679,000.
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 nine Programmer-style bags for each Executive-style bag, what would be the new break- even volume for On-the-Go?
The special order would be processed in two batches of 2,700 bags each. What is the total relevant cost of filling this special sales order
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