The Sales Mix of Palm Company Is 5 Units of A

question 52

Essay

The sales mix of Palm Company is 5 units of A, 3 units of B, and 1 unit ofC. Per unit sales prices for each product are $30, $40, and $50, respectively. Variable costs per unit are $14, $24, and $34, respectively. Fixed costs are $597,600. What is the break-even point in composite units and in units of A, B, and C?

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Definitions:

Net Operating Income

a gauge of a company's financial performance, calculated as gross income minus operating expenses, excluding taxes and interest.

Present Value

The present worth of a sum of money or cash flows expected in the future, based on a certain rate of return.

Cash Flow

The combined value of financial transactions into and out of an enterprise, crucially affecting its cash reserves.

Present Value

is the current worth of a future sum of money or stream of cash flows given a specified rate of return.