Atlanta Radio Supply Sells Only Two Products,Product X and Product

question 124

Essay

Atlanta Radio Supply sells only two products,Product X and Product Y.
$$\begin{array} { | l | c | c | c | } \hline & \text { Product } X & \text { Product } Y & \text { Total } \\\hline \text { Selling price } & \$ 25 & \$ 45 & \\\hline \text { Variable cost per unit } & \$ 20 & \$ 35 & \\\hline \text { Total fixed costs } & & & \$ 350,000 \\\hline\end{array}$$ Atlanta Radio Supply sells three units of Product X for each two units it sells of Product Y.Atlanta Radio Supply has a tax rate of 25%.
Required:
a.What is the breakeven 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 Atlanta Radio Supply desired an after-tax net income of $210,000,using its tax rate of 25%?

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Definitions:

Involuntary Nervous System

Part of the peripheral nervous system that controls involuntary bodily functions, including those of the heart, digestive system, and respiratory system. It's also known as the autonomic nervous system.

Motor Neurons

Neurons that carry outgoing information from the central nervous system to muscles and glands, facilitating movement and action.

Bait Advertising

A deceptive marketing practice that involves advertising a product at a specific price or condition which is not genuinely offered to induce sales of another product.

Buyers

Individuals or organizations that purchase goods or services for personal use, resale, or use in production.