Question

1. ABC Company sells three products with exactly the same price of $20 a unit. However, A’s variable cost is at 40%, B’s at 50%, and C’s at 60%. Sales mix for A, B, and C is at 500, 1500, and 3000 units respectively. Fixed costs amount to $18,000. Breakeven sales for B should be a. 600 b. 1,200 c. 1,800 d. 2,000

2. ABC’s sales mix has drastically changed due to market conditions to 3000, 1500, and 500 units for A, B, and C respectively. Fixed costs have increased to $22,000 per period. The selling price is at $20 a unit for all products with a variable cost of 40%, 50%, and 60% for A, B, and C respectively. Breakeven units for A will be
   a. 300 b. 600 c. 900 d. 1,200

Answer 1