Question

In: Accounting

Turner Inc. produces two products P1 and P2. The company has provided you with the following...

Turner Inc. produces two products P1 and P2. The company has provided you with the following information. Assume that the current sales volume of P1 and P2 reflects the long run sales mix of the firm.
P1 P2
Selling price per unit $30 $60
Variable cost per unit $10 $30
# of units sold 9,000 6,000
Total fixed costs $240,000
Select ALL statements that are TRUE. All numbers in the answer choices are rounded off to 2 decimals. Breakeven volume in units is rounded off to the next higher integer.
A.
40% of Turner's revenue comes from P2
B.
The operating leverage for Turner now is 0.47
C.
Turner makes a contribution of $0. 57 per dollar of revenue, on the average.
D.
Turner will breakeven when it reaches a revenue of $420,000.
E.
The breakeven volume for Turner is 9,334 units

Solutions

Expert Solution

Option (C),(D) is correct.

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