Question: Both Research In Motion and Apple sell numerous hand-held consumer products, and each of these companies has a different product mix.
Required: 1. Assume the following data are available for both companies. Compute each company's break-even point in unit sales. (Each company sells many hand-held consumer products at many different selling prices, and each has its own variable costs. This assignment assumes an average selling price per unit and an average cost per item.)
Research In Motion Apple
Average selling price per item sold . . . . . . . . . . $350 $280
Average variable cost per item sold . . . . . . . . . $140 $110
Total fixed costs . . . . . . . . . . . . . . . . . . . . . . . . . $14,980 million $12,580 million
2. If unit sales were to decline, which company would experience the larger decline in operating profit (OP)? Explain.