Problem: Tops Company sells Products D and E and has made the following estimates for the coming year:
Product Unit Selling Price Unit Variable Cost Sales Mix
D $30 $24 60%
E 70 56 40
Fixed costs are estimated at $202,400. Determine:
(a) the estimated sales in units of the overall product (Sales Mix) necessary to reach the break-even point for the coming year,
(b) the estimated number of units of each product necessary to be sold to reach the break-even point for the coming year, based on the Sales Mix calculations and
(c) the estimated sales in units of the overall product necessary (Sales Mix) to realize an operating income of $119,600 for the coming year.