Exhibit 6-4
Sanchez Company Produces Two Different Remote Control Products

question 68

Multiple Choice

Exhibit 6-4
Sanchez Company produces two different remote control products with the following monthly data for the most recent month:
$\begin{array}{lccc}& \text { Plane } & \text { Boat } & \text { Total } \\\text { Selling price per unit } & \$ 300 & \$ 100 & \\\text { Variable cost per unit } & \$ 240 & \$ 60 & \\\text { Expected unit sales } & 28,000 & 7,000 & 35,000 \\\text { Sales mix } & 80 \% & 20 \% & 100 \% \\\text { Fixed costs } & & & \$ 1,400,000\end{array}$


-Refer to Exhibit 6-4.Assume the sales mix remains the same at all levels of sales.
How many units of each product must be sold to break even?

• A)Plane 22,400 units;Boat 5,600 units
• B)Plane 11,200 units;Boat 2,800 units
• C)Plane 20,000 units;Boat 5,000 units
• D)Plane 56,000 units;Boat 14,000 units
• E)None of the answer choices is correct.

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Definitions:

Different Market Segment

A distinct subset of a market composed of individuals or organizations sharing one or more characteristics that cause them to have similar product needs.

Multiproduct Branding

A marketing strategy where a single brand name is used for the sale of two or more related products.

Wholesaler or Retailer

This term refers to businesses involved in the sale of goods. Wholesalers typically sell products in large quantities to retailers or other businesses, while retailers sell products directly to the final consumer.

Contractual Agreement

A legally binding contract that specifies the terms and conditions agreed upon by two or more parties.