Question:
Douglas Corporation produces and sells two models of vacuum cleaners, Standard and Deluxe. Company records show the following data relating to these two products:
|
|
Standard
|
Deluxe
|
|
Selling price per unit
|
$140
|
$155
|
|
Variable production costs per unit
|
$110
|
$116
|
|
Variable selling and admin. expense per unit
|
$15
|
$12
|
|
Expected monthly sales in units
|
600
|
1,200
|
The company"s total monthly fixed expense is $15,000.
If the expected monthly sales in units were divided equally between the two models (900 Standard and 900 Deluxe), the break-even level of sales would be:
A) the same as with the expected sales mix.
B) higher than with the expected sales mix.
C) lower than with the expected sales mix.
D) cannot be determined with the available data.