A Company is selling two products A and B. It sells the two products at the...

A Company is selling two products A and B. It sells the two products at the prices of AED 190 and 230 respectively. The finance department estimated the fixed cost for both products A and B as AED 2400 and 2550 and the variable cost to make a unit of each product is AED 70 and 60 respectively.

Compute the number of units the company must sell to Break-Even from each product? Compute the total revenue at these Break-Even Points?
Compute the number of units the company sells at which the two products have the same total cost? Compute the company total revenue for this number of sold units?

If the company used new technology in redesigning product A and the total fixed cost reduced to AED 2250. The marketing department estimated the new selling price per unit to be AED 240 and that the company would be break-even if they sale 10 units of product A. Compute the variable cost per unit and the total variable cost of the newly designed product A?

Expert Solution

Dear Reader

The question test the concept of break even point analysis.

Hope you will understand the solution.

Happy reading!

Stay Safe...

Note: Please let us know if you like the solution.

jeff jeffy answered 1 year ago

Alpha Company is selling three products: A, B and C. The company sells three units of...

Alpha Company is selling three products: A, B and C. The company sells three units of A for every unit of C, and two units of B for every unit of A. Fixed costs are 720,000 Contribution margins are: A - 1.90 B - 2 C - 2.30 How many units of B would the company sell at break even point?

Q-7 A company sells its two products A and B. The prices of products A and...

Q-7 A company sells its two products A and B. The prices of products A and B are $5 and $8 per unit respectively. The material costs for A and B are $0.5 and $1.5 per unit respectively. The labour charges of $0.5 per unit is same for both of the products A and B. The fixed cost of the business is estimated as $3000. Formulate the total revenue function if x1 and x2 units are sold of product A...

A company sells two products, A and B. Product A Product B Produced and sold 8.000...

A company sells two products, A and B. Product A Product B Produced and sold 8.000 units 16.000 units Sale price per unit 65 52 Variable cost per unit 35 30 Fixed cost per unit 15 15 Fixed cost is divided in a traditional way, based on the produced quantity. The company started to design a new product C to replace product B. The company could sell 11.000 units of product C with a selling price of 80 per unit....

A company sells two products, Product A and Product B. Assume that the variable costs for...

A company sells two products, Product A and Product B. Assume that the variable costs for each product are $7. In a particular market, men and women value the two products as follows: Value to the Customer Product A Product B Men (50 % of market) $ 12 $ 15 Women (50 % of market) $ 14 $ 11 If management is considering offering a bundle containing both products, what is the maximum price that could be charged for this...

A company produces and sells two products – A and B. During January 2020 A were...

A company produces and sells two products – A and B. During January 2020 A were sold at the amount of $19,200 and its variable expenses were $6,336. B were sold at the amount of $32,800 and its variable expenses were $11,344. Fixed expenses were $32,280. Compute 1. Break-even point for the company in total sales dollars. Show your calculation 2. If the sales mix shifts toward A without changes in total sales, what is the company’s break- even point?...

A Company manufactures and sells two products: A and B. The following table shows the information...

A Company manufactures and sells two products: A and B. The following table shows the information relating to these products: A B Total Selling price per unit $20 $40 Variable cost per unit $10 $20 Total Fixed costs $80,000 Required: If Sales mix is 2 :3 for A and B respectively, calculate the breakeven point in units and in dollars for each of the two products.

Company A is selling packing material to the consumer products company B. Company B needs 1.021...

Company A is selling packing material to the consumer products company B. Company B needs 1.021 km of a certain carton per year. The costs structure is as follows. q unit Price (?) per km 10 km 310.00 50 km 243.00 100 km 230.00 150 km 227.00 200 km 223.00 300 km 222.40 Orders below 10,000 m are not allowed. The company uses a holding cost rate of 30% per year. An economist has determined the fixed ordering costs at...

Reliable Supply Company sells only two products, Product A and Product B. Product A Product B...

Reliable Supply Company sells only two products, Product A and Product B. Product A Product B Total Selling price $35 $58 Variable cost per unit $27 $42 Total fixed costs $395,000 Reliable Supply sells 4 units of Product A for each 3 units it sells of Product B. Reliable Supply has a tax rate of 20%. Required: a. What is the breakeven point in units for each product, assuming the sales mix is 4 units of Product A for each...

A company sells only two products, Product A and Product B, and has the following cost...

A company sells only two products, Product A and Product B, and has the following cost information: Selling price per unit – Product A $4 Selling price per unit – Product B $5 Variable cost per unit – Product A $2 Variable cost per unit – Product B $3 Total fixed costs $840 The company sells two units of Product A for each unit it sells of Product B. The company faces an income tax rate of 30%. A) What is the breakeven point in...

1. The Wilcox Company sells two products, A and B, with contribution margin ratios of 40...

1. The Wilcox Company sells two products, A and B, with contribution margin ratios of 40 and 30 percent and selling prices of $5 and $2.50 a unit. Fixed costs amount to $72,000 a month. Monthly sales average 30,000 units of product A and 40,000 units of product B. Required: a. Assuming that three units of product A are sold for every four units of product B, calculate the dollar sales volume necessary to break even. b. As part of...

Question