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Q1) Penury Company offers two products. At present, the following represents the usual results of a month\'s operations:

 

Product K

Product L

 

 

 

Per

 

Per

Combined

 

Amount

Unit

Amount

Unit

Amount

Sales revenue

$120,000

$1.20

$80,000

$0.80

$200,000

Variable expenses

   60,000

  0.60

  60,000

  0.60

  120,000

Contribution margin

$  60,000

$0.60

$20,000

$0.20

80,000

Fixed expenses

 

 

 

 

    50,000

Net operating income

 

 

 

 

$  30,000

Company is thinking of decreasing product K's unit sales to 80,000 and increasing product L's unit sales to 180,000, leaving unchanged the selling price per unit, variable expense per unit, and total fixed expenses.

Under new plan, determine the break-even point in terms of dollars.

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M918446

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