Arnold, Inc. sells only two products, Product X and Product Y. The following data relate to expected sales for…

Question:

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Arnold, Inc. sells only two products, Product X and Product Y. The following data relate to

expected sales for the coming period:

Sales units

Sales revenue

Variable costs

Fixed costs

Product X

20,000

$240,000

$140,000

$89,168

Product Y

30,000

$300,000

$120,000

$73,820

(2 points) How many units of each product are needed for Arnold to breakeven at the

given sales mix? (Do not round relevant intermediate calculations, such as

percentages). (2 points) Given their current operating income, by what percentage will Arnold’s

profits increase if sales increase by 1.50%? (Round final answer in percentages to 2

decimal places)

Expert Answer:

Answer rating: 100% (QA)

Determining the breakeven point the number of units for each product that would result in zero operating income is needed by setting the total revenue

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