Required:
1. What is the company’s over-all break-even point in dollar sales?
2. Of the total fixed expenses of $271,000, $41,300 could be avoided if the Velcro product is dropped, $102,600 if the Metal product is dropped, and $94,000 if the Nylon product is dropped. The remaining fixed expenses of $33,100 consist of common fixed expenses such as administrative salaries and rent on the factory building that could be avoided only by going out of business entirely.
a. What is the break-even point in unit sales for each product?
b. If the company sells exactly the break-even quantity of each product, what will be the overall profit of the company?
What is the company’s over-all break-even point in dollar sales? (Round CM ratio to 4 decimal places and final answer to the nearest thousand dollars.) $______
What is the break-even point in unit sales for each product? (Do not round intermediate calculations.)
Velcro Metal Nylon
Break even point in unit sales
If the company sells exactly the break-even quantity of each product, what will be the overall profit of the company?
Is it Net operating income or Net operating loss ___________