A firm sells two different products, A andA. Total fixed costs for this firm are $1,260,000. Additional selling prices and cost information for both products follow:
Required: (a) Calculate the contribution margin per composite unit.
(b) Calculate the break-even point in units of each individual product.
(c) If pretax income before taxes of $294,000 is desired, how many units of A and B must be sold?
B. For each unit of B, the firm sells two units of
Definitions:
Variable Costs
Costs that vary directly with the level of production or sales, such as materials and labor.
Fixed Costs
Expenses that do not change with the volume of production or sales, such as rent, salaries, and insurance.
Logistics Department
The division in a company that is responsible for the planning, control, and management of the movement and storage of goods.
Variable Costs
Outgoings that vary precisely in accordance with the quantity of production or output.
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