Sundial, Inc., produces two models of sunglasses-AU and NZ. The sunglasses have the following characteristics. Selling price per unit…

Question:

Transcribed Image Text:

Sundial, Inc., produces two models of sunglasses-AU and NZ. The sunglasses have the following characteristics.

Selling price per unit

Variable cost per unit

Expected units sold per year

$

$

AU

360

68

50,000

$

$

NZ

368

180

75,000

The total fixed costs per year for the company are $5,244,000.

Required:

a. What is the anticipated level of profits for the expected sales volumes?

b. Assuming that the product mix is the same at the break-even point, compute the break-even point.

c. If the product sales mix were to change to four pairs of AU sunglasses for each pair of NZ sunglasses, what would be the new

break-even volume for Sundial, Inc.? What is the anticipated level of profits for the expected sales volumes?

Anticipated profit

Required A Required B

Required C

Break-even point

Assuming that the product mix is the same at the break-even point, compute the break-even point.

Break-even point

units

Required A

Required C

units

< Required A
Required A Required B
If the product sales mix were to change to four pairs of AU sunglasses for each pair of NZ sunglasses, what would be the new
break-even volume for Sundial, Inc.?
Required B >

< Required B
Required C >

Required C>

Expert Answer:

Answer rating: 100% (QA)

Break Even Analysis The break even point is usually determined in units and dollars by using the values of contribution margin per unit and contributi

View the full answer