Pines Inc Produces and Sells Two Products

question 49

Essay

Pines Inc. produces and sells two products. During the most recent month, Product DQ393's sales were $25,000 and its variable costs were $5,750. Product BA999's sales were $40,000 and its variable costs were $9,850. The company's fixed costs were $48,310.
Required:
a. Determine the overall break-even point for the company.
b. If the sales mix shifts toward Product DQ393, with no change in total sales, what will happen to the break-even point for the company? Explain.

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Definitions:

CCC/C

A credit rating symbol used by rating agencies to denote a high risk of default; regarding bonds or loans, it signifies very poor credit quality.

Default Rate

The percentage of borrowers who fail to make payments on their debts or loans as agreed, leading to a default status.

Moody's "Aaa"

The highest credit rating given by Moody's Investors Service, denoting the lowest risk of default for bonds and other fixed-income securities.

Default Rate

The percentage of borrowers who fail to remain current on their loans or credit agreements, indicating the level of credit risk associated with a loan portfolio.