Question

Charlie Company produces three products, A, B and C. Details on the products are included below....

Charlie Company produces three products, A, B and C. Details on the products are included below. The company’s fixed costs total $40,000.

A

B

C

Selling price

$15

$21

$36

Variable cost/unit

9

14

19

Sales Mix

20%

20%

60%

Using EXCEL:

A. Compute the Breakeven in units for the company. (Be sure to indicate how many of each product must be sold at breakeven.)

B. Will the company breakeven if the sales mix changes so sales mix of A = 40% and sales mix of C = 40%? Will it make or lose money?

C. Will the company breakeven if the sales mix changes so sales mix of B = 10% and sales mix of C= 70%? Will it make or lose money?

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