Hargenrader Inc

question 88

Essay

Hargenrader Inc. produces and sells two products. During the most recent month, Product P02S's sales were $24,000 and its variable expenses were $7,920. Product O50U's sales were $41,000 and its variable expenses were $14,180. The company's fixed expenses were $40,350.
Required:
a. Determine the overall break-even point for the company in total sales dollars. Show your work!
b. If the sales mix shifts toward Product P02S with no change in total sales, what will happen to the break-even point for the company? Explain.

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Definitions:

Capital Balances

The amount of money that partners or shareholders have invested in a company, not withdrawn, and recorded in capital accounts.

Net Loss

The amount by which total expenses exceed total revenues for a business, indicating financial loss.

Salary

A fixed amount of money or compensation paid to an employee by an employer in return for work performed.

Share

Represents a unit of ownership interest in a corporation or financial asset.