Question

Assume that Ocean King Products sells three varieties of canned seafood with the following prices and...

Assume that Ocean King Products sells three varieties of canned seafood with the following prices and costs.

Selling Price
per Case		 Variable Cost
per Case		 Fixed Cost
per Month
Variety 1 $ 12 $ 9 –
Variety 2 13 11 –
Variety 3 18 14 –
Entire firm – – $ 47,800

The sales mix (in cases) is 60 percent Variety 1, 25 percent Variety 2, and 15 percent Variety 3.

Required:

a. At what sales revenue per month does the company break even?

b. Suppose the company is subject to a 35 percent tax rate on income. At what sales revenue per month will the company earn $47,710 after taxes assuming the same sales mix?

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