The Horner Company Makes Three Products Total Annual Fixed Costs Are $840,000

question 100

Essay

The Horner Company makes three products.The cost data for these three products is as follows:
$\begin{array}{llll}&Product~ A&Product~ B&Product ~C\\\hline\text { Selling price } & \$ 10 & \$ 20 & \$ 40 \\\text { Variable costs } & 7 & 12 & 16\end{array}$ Total annual fixed costs are $840,000.The firm's experience has been that about 20 percent of dollar sales come from product A,60 percent from B,and 20 percent from
C.
Required:
a. $\text { Compute break-even in sales dollars }$
b. $\text { Determine the number of units to be sold at the break-even point }$

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