AFL Boots Sells Only Two Products,Product X and Product Y

question 196

Essay

AFL Boots sells only two products,Product X and Product Y.
$\begin{array}{|l|c|c|c|} \hline& \text { Product } X & \text { Product } Y & \text { Total } \\\hline \text { Selling price } & \$ 25 & \$ 45 & \\\hline \text { Variable cost per unit } & \$ 20 & \$ 35 & \\\hline \text { Total fixed costs } & & & \$ 350000 \\\hline\end{array}$
AFL Boots sells three units of Product X for each two units it sells of Product Y.The company has a tax rate of 25%.
Required:
a.What is the break-even point in units for each product,assuming the sales mix is 3 units of Product X for each two units of Product Y?
b.How many units of each product would be sold if AFL Boots desired an after-tax net profit of $210 000,using its tax rate of 25%?
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Definitions:

Systematic Trends

Patterns or movements in data that consistently occur over a specified period, indicative of a broader phenomenon or change.

Equilibrium Price

The equilibrium price is the market price at which the quantity of goods supplied equals the quantity demanded, leading to a balance in the market.

Market

A space or system in which parties engage in exchange, buying and selling goods and services.

Price

The monetary total projected, essential, or disbursed as payment for an item.