The Jordan Company Makes Three Products $\text {\underline{ Product A} }$

question 46

Essay

The Jordan Company makes three products.The cost data for these three products is as follows:

                             $\text {\underline{ Product A} }$   $\text {\underline{ Product B} }$   $\text {\underline{ Product C} }$
$\begin{array}{lcc}\text { Selling price } & \$ 10 & &\$ 20&&&\$40 \\\text { Wariable cocte } & 7& & 12&&&16\end{array}$
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. Compute break-even in sales dollars.
b. Determine the number of units to be sold at the break-even point.

---

Definitions:

Freight-Absorption Pricing

A pricing strategy where the seller absorbs all or part of the freight charges to attract customers from distant locations.

Mississippi River

A major North American river that flows southward from northern Minnesota to the Gulf of Mexico, serving as a critical waterway for transportation and commerce.

FOB Factory

FOB Factory, or Free on Board Factory, is a pricing term that indicates the buyer takes responsibility for goods once they leave the seller's premises.

Neiman Marcus

is a luxury department store chain in the United States known for its high-end clothing, accessories, and home furnishings.