A firm sells two different products,A and B.For each unit of B sold,the firm sells two units of A.Total fixed costs $1,260,000.Additional selling prices and cost information for both products follow:
Required:
(a)Calculate the contribution margin per composite unit.
(b)Calculate the break-even point in units of each individual product.
(c)If pretax income before taxes of $294,000 is desired,how many units of A and B must be sold?
Definitions:
Cost of Goods Sold
Cost of Goods Sold (COGS) indicates the direct costs attributable to the production of the goods sold by a company, including material and labor expenses.
Sales
The total income a company generates from selling goods or services before any expenses are subtracted.
Cost of Goods Sold
An expense measure that reflects the cost of the materials and labor directly tied to the production of goods sold by a company.
Inventory Purchases
The total amount of goods a company buys for the purpose of reselling them during a particular period, often used to replenish stock levels.
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