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In: Accounting

Bitcom Pte Ltd sells only 2 products - G and H and has made the following...

Bitcom Pte Ltd sells only 2 products - G and H and has made the following estimates for the coming year:

Product

Unit Selling Price

Unit Variable Cost

Sales Quantity

G

$30

$24

30,000

H

  70

  56

20,000

Fixed costs are estimated at $202,400.

Required:

  1. What is the sales mix?
  2. What is the estimated sales in units of the combined product necessary to reach the break-even point for the coming year?
  3. What is the estimated number of units of each product necessary to be sold to reach the break-even point for the coming year?
  4. Assume that the sales mix was 40% Product G and 60% Product H.  Without any further calculation, compare the break-even point with that in part (b).  Why is it different?
  5. Support your answer in item d with computations of the change in the break-even point.

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